Tamro Latvia

• net sales EUR 118 (107) million
• personnel 370
• average market share in wholesale 23%

Market overview

The pharmaceutical market in Latvia was characterised by high growth. The total pharmaceutical market increased by 25% and the sales in pharmaceutical wholesale totalled EUR 260 million in 2007/08.

The rise was fuelled by a 15% price increase and 8% volume growth. The considerable (45%) increase in state budget allocations for reimbursed medicines has an impact as well. Nevertheless, the proportion of state-reimbursed medicines in Latvia is still the lowest among European countries. As the share of reimbursed medicines grows, so does the risk that they will become unprofitable. The margin of reimbursed prescription medicines are 30-45% lower than for non-reimbursed prescription medicines in retail sector.

Tamro Latvia’s sales amounted to EUR 118 (107) million, which is an increase of 10%. The market share in wholesaling was 23%, placing Tamro Latvia as the second largest wholesaler in the country, and in retail 26%, including fully owned and membership pharmacies.

Main events

Tamro Latvia continued its retail expansion through pharmacy acquisitions and development of the existing pharmacies.  

In order to attract more consumers, Tamro Latvia’s pharmacy chain Gimenes Aptiekas launched a Gold Card for VIP customers with even more advantages. The regular Client Card will remain in use. Several activities and value-added services were offered to Gimenes regular members, e.g. a seasonal client magazine called “Health Formula”. Presently regular customers number near 70,000.

Tamro Latvia introduced a new, integrated IT system during 2007. The project experienced some problems and therefore impacted the business. The situation has been stabilized and the system is working as expected.

Outlook for 2008/09

The most important event in 2008 will be the finalisation of the new Pharmacy Law. This law may restrict Tamro’s possibility to acquire new pharmacies, as it establishes that as from 2011, only pharmacists can own pharmacies. Gimenes Aptiekas plans to acquire ten more pharmacies during 2008. The chain will then comprise more than 60 pharmacies.

The lack of additional funds for reimbursed medicines budget, as well as the government measures taken to cut the inflation rate, will slow down wholesale market growth. The growth rate is forecasted at 12%.

Key Figures