Baier Group: Fighting the Good Fight for Fair Competition in Building Supplies

The Commerce Commission this week released its final report into New Zealand’s building‑supplies sector and opened an investigation into Fletcher Building’s GIB rebate scheme. The development has prompted active discussion across the industry about market concentration, loyalty incentives and the practical effects on competition for builders, merchants and suppliers.

What the Commerce Commission found — and what it is investigating

The Commission’s report highlights the market position of GIB plasterboard, manufactured by Winstone Wallboards (a Fletcher Building subsidiary). The report notes GIB holds an estimated 94% share of the New Zealand plasterboard market. It also records that Fletcher offered rebate arrangements for customers buying GIB in bulk or demonstrating loyalty — arrangements the Commission says had the potential to exclude smaller suppliers and merchants.

As the inquiry was announced, Fletcher Building moved to discontinue the rebate scheme. That timing underscores the regulator’s renewed focus on competition within the building‑supplies sector and signals pressure on suppliers to reassess commercial practices that could disadvantage smaller market participants.

Why competition in building supplies matters

Competition matters across the construction supply chain. When a small number of suppliers dominate, buyers face fewer choices and less price sensitivity. Loyalty and rebate schemes linked to dominant market share can entrench that position and reduce opportunities for smaller players to compete. As Commerce Commission chair Dr John Small put it: “Competition can and should take a more prominent position.”

For builders, merchants and specifiers, stronger competition supports:

• Access to alternative products and systems;
• Improved service levels and responsiveness from suppliers;
• Greater price transparency and more competitive pricing;
• Incentives for product innovation and supply‑chain resilience.

What this could mean for the industry — short and medium term

Horizon	Possible effects	What builders & merchants should monitor
Immediate	Discontinuation of rebate scheme; regulator inquiry underway.	Supplier communications, contract terms, and transitional pricing.
Short‑term (months)	Market reaction as merchants seek alternatives; commercial renegotiation.	Availability of alternative plasterboard brands and merchant stocking strategies.
Medium‑term	Potential for restored competition if barriers to entry ease; outcomes depend on the inquiry and market response.	New supply relationships, specification choices and procurement policies.

Practical steps for builders, merchants and specifiers

While the final market impacts will depend on the Commission’s inquiry and how suppliers respond, businesses can take practical steps now to manage risk and preserve purchasing options.

Baier Group’s view

At Baier Group we monitor developments like this closely. A healthy, competitive building‑supplies market supports resilience and choice for our customers and the wider construction industry. We support regulatory scrutiny that aims to protect fair dealing and open access to suppliers and products.

If you have concerns about procurement, pricing or supply continuity as the inquiry progresses, please contact your local Baier representative. We are ready to discuss alternative products, stock strategies and how to protect project budgets and timelines during market change.