In its final report into the residential building supplies industry, the commission said familiar products had become embedded in building homes in New Zealand.
It highlighted quantity-forcing rebates as one of two key concerns, saying they could provide some benefits but appeared in some situations to reward merchants for purchasing large volumes through a single supplier.
This was making it harder for new and competing suppliers, it said, but suggested more research would be needed.
The second main concern was that the regulatory system was making the uptake of new and innovative products too slow, costly and uncertain.
The regulator recommended the building regulatory system should include competition as an express objective.
It also recommended better serving Maori through the building regulatory system; creating better compliance pathways for a broader range of building supplies; and exploring ways to remove impediments to product substitution and variations.
Following the report, plasterboard supplier Winstone Wallboards said it would remove its rebates structure.
Winstone Wallboards was a particular focus in the commission’s study. The company, owned by Fletcher Building, is New Zealand’s only domestic manufacturer of plasterboard.
Fletcher Building said it has been advised the commission has opened another investigation into Winstone’s use of rebates.
The rebates are a volume incentive, where a customer receives a better rebate if they buy pre-agreed volumes.
In a statement, Winstone said the commission had previously investigated its rebates and concluded there was no issue.
‘‘We are therefore surprised by the commission’s conclusion that it needs a third investigation . . . ’’
Commerce and Consumer Affairs Minister David Clark said Winstone’s voluntary changes showed the effect of conducting the market studies.
‘‘When there’s a spotlight on the sector, the sector thinks carefully about its behaviour,’’ Mr Clark said.
‘‘In the early findings the commission recommended that everybody look at their rebate systems, decide whether they were fit for purpose then come back to the market. What we’ve seen here is one player consider whether it’s in the right space here.’’
Building and Construction Minister Megan Woods agreed.
‘‘I think we should think of this as a sign of how effective these market studies can be, that even while the press conference is being held we’re seeing major moves and announcements from industry players.’’
Another problem identified was that of restrictive land covenants and exclusive leases — a problem which was also found in the supermarket study.
Commission chairman John Small said these would be the focus of further work and it was suggested the Government consider a cross-sector approach.
Mr Clark said a full response to the report would be provided in due course but would ‘‘certainly be picking up’’ that aspect.
‘‘We’ll do the policy work, we’ve seen it come up in the fuel study, we’ve seen it come up in the grocery study and now we’ve seen it come up in the building supplies study. It is clearly a systematic issue,’’ he said.
He also pointed to the Government’s changes to the Commerce Act coming in April which aim to strengthen anti-competitive measures with increased penalties for anti-competitive behaviour, and strengthening the Commission.
