MOL: Eyes to distribute certain OTC drugs in its retail fuel network

MOL is looking to enter the newly liberalized Hungarian pharmaceutical retail market, which allows the sale of certain non-prescription (OTC) medicines outside pharmacies, including fuel stations – Interfax reported. MOL announced on Friday in a regulatory filing, that it has modified its articles of association to include "retail trade of pharmaceuticals, medicinal supplements and cosmetics" among its list of chartered activities. These products are mostly painkillers, vitamins, anti-cold medication, eye-drops, and skin care products, among others. According to experts, only a small fraction of total OTC drug market sales could go though this sales channel. In 2005, Hungary’s OTC drug market value totaled EUR 250m according Association of the European Self-Medication Industry.

Our view: We see the news as neutral. We see MOL intends to strengthen its premium positioning on the Hungarian retail fuel market through providing a wider variety of products/services. However, due to the strict legal requirements, we do not expect high profit from this additional activity, we rather think the distribution of certain OTC drugs might generate some cross-selling.