Business watchdog to take Carter Holt Harvey to court

19:46, Dec 20 2013

Fletcher Building is compensating customers caught in a price-fixing pact between itself and Carter Holt Harvey (CHH) in Auckland's timber market.

The Commerce Commission revealed yesterday that it was prosecuting CHH and one of its managers, Dean Dodds, for fixing prices for structural timber with Fletcher Distribution in the city.

It said both CHH and Dodds had co-operated with its investigation and had admitted breaching the Act, paving the way for a penalty hearing in the High Court.

Fletcher Distribution was given immunity for raising the alarm.

The cartel is believed to have run during the latter half of 2012 and early this year.

Fletcher Building said yesterday it discovered the cartel during a regular internal audit and review process earlier this year. It found price-fixing activity had occurred at two of its central Auckland stores - PlaceMakers Cook Street and Mount Wellington.

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As a result, it said the price arrangements had benefited PlaceMakers' pre-tax earnings by just under $100,000. Commercial customers adversely affected by the "irregular quotes" would be compensated, Fletcher said.

The firm had also reviewed timber pricing in other areas and was confident it only happened in Auckland's market.

A Fletcher spokesman confirmed staff who had fallen below its expected standards of behaviour had been "appropriately held to account".

Gordon Buswell, acting chairman of the Building Industry Federation and ITM's chief executive, said he did not think the case was widespread. Auckland's timber market was "intensely competitive".

"I think it would be a very unusual situation.

"When I first heard about the case, I just couldn't put it into context with my understanding of the market. There are too many alternatives," he said.

Under the Commerce Act, the penalty for price-fixing is either a fine of up to $10 million, a penalty related to the gain, or a percentage of the company's turnover. Fairfax NZ

Taranaki Daily News