Commission concludes plasterboard investigation
Commission concludes plasterboard investigation
The
Commerce Commission has completed its investigation into
allegations that Winstone Wallboards Limited (a subsidiary
of Fletcher Building) acted anti-competitively to maintain
its market position in the manufacture and supply of
plasterboard.
Based on the evidence gathered during the investigation the Commission does not believe Winstone has breached the Commerce Act 1986 and it will not be taking any further action.
The Commission’s investigation was centred on three areas – Winstone’s alleged exclusive agreements with merchants, the rebates Winstone pays to merchants, and Winstone’s alleged practice of undercutting other plasterboard suppliers on jobs.
Commission Chairman, Dr Mark Berry, said “We have completed a thorough investigation and there is no evidence to suggest that Winstone has breached the Commerce Act in any of these areas.”
“Winstone’s supply contracts with merchants (excluding Placemakers which is also a subsidiary of Fletcher Building) do not contain contractual provisions that require the merchants to purchase all their plasterboard from Winstone. Nor do we believe that the rebates Winstone pays to merchants result in merchants purchasing nearly all of their plasterboard from Winstone.”
“The evidence suggests the loyalty shown to Winstone and its large market share is likely a result of a number of other factors – its level of service (in particular, technical product information and delivery support), the quality of GIB products, comparative prices, regulatory barriers to entry to the market, and until recently import duties on plasterboard.”
“If Winstone were to stop using rebates tomorrow, we would not expect to see any greater competitiveness of the market.”
“This
investigation was complex and as a result lengthy. An
initial investigation was completed in April this year.
However, additional information was provided by complainants
which led us to undertake an additional round of interviews
and further investigation.”
“While plasterboard only
accounts for between 1% and 3% of the cost of building a new
home in New Zealand (excluding land), the construction
industry is a very important part of the New Zealand
economy. As such, we needed to ensure we took the time to
complete a very thorough investigation,“ said Dr
Berry.
A copy of the investigation report can be found at http://www.comcom.govt.nz/business-competition/competition-enforcement-responses/investigation-reports/
ends