The Commerce Commission this week released its final report into New Zealand’s building supplies sector and simultaneously opened an investigation into Fletcher Building’s GIB rebate scheme. The move has stirred discussion across the industry about market concentration, purchasing incentives and the practical effects on competition for builders and merchants.
What the Commission found and what it’s investigating
Fletcher Building, through its Winstone Wallboards subsidiary, manufactures GIB plasterboard. The Commission’s report noted that GIB holds a dominant share of the New Zealand plasterboard market — around 94 percent — and that Fletcher had been offering rebates to customers who bought GIB in bulk and demonstrated loyalty. According to the report, those arrangements had the potential to shut smaller suppliers and merchants out of the market.
As the Commerce Commission announced its inquiry, Fletcher Building moved to discontinue the rebate scheme. The timing underlines the regulator’s renewed focus on building-supplies competition and the pressure on suppliers to reassess commercial practices that may disadvantage smaller market participants.
Why competition matters for builders and suppliers
Competition in building supplies matters to everyone in the construction chain. When a small number of suppliers dominate a market, buyers can face fewer choices, less price sensitivity and less incentive for innovation. Reward or loyalty schemes linked to large market shares can reinforce that dominance and reduce opportunities for smaller players to compete.
That was the point made by Commerce Commission chair Dr John Small: “Competition can and should take a more prominent position.” For builders, merchants and specifiers, stronger competition can mean better access to alternative products, improved service levels and more competitive pricing — all benefits that support project budgets and buildability.
What this means for the industry
The Commission’s action is a reminder that commercial arrangements in our sector are under scrutiny and that suppliers will need to balance commercial strategy with compliance and fair-dealing considerations. For merchants and contractors, the investigation — and Fletcher’s decision to remove the rebate — may open space for increased supplier choice over time, but the practical impacts will depend on how the market adjusts.
At Baier Group we follow developments like this closely. A healthy, competitive building-supplies market supports resilience and choice for our customers and the wider construction industry. We remain committed to fair dealing and providing competitive options for builders and merchants across New Zealand.
If you’d like to discuss how these developments might affect your procurement or pricing, contact your local Baier representative.
