The supply of plaster board is again under the spotlight as a manufacturer claims Fletcher Building is preventing competition.
Renewed interest in this investigation comes on the back of CHH being fined $1.85 million for price fixing with Fletchers in the Auckland timber market (read the initial post on competition here) and revised calls for the Government to reduce the cost of building products (read the post here).
The Commerce Commission has been looking into this area since last September and confirmed that the investigation was ongoing. The recent complaint focuses on incentives offered to suppliers of building products if they sold Winstone board. A rival plasterboard product, Elephant Plasterboard, has complained that these practices have restricted it from competing in the marketplace. A spokesperson for Fletcher Building has stated that volume and loyalty incentives are common in most industries and do not amount to anti-competitive behaviour.
Winstone board has an estimated market share of 94%, compared to Elephant Plasterboard which makes up around 3%. This dominance was one of the reasons that the government awarded part of the $40m plasterboard supply deal for the Christchurch rebuild to German company Knauf.
Click here to read the article on this issue published by The Herald.