Fletcher Building's role investigated
The Commerce Commission is investigating Fletcher Building's role in the New Zealand plasterboard market, Fletcher Building says.
The move follows a complaint alleging Fletcher Building is abusing its market position.
Fletcher Building has a 90 per cent market share, and which has been proving lucrative.
In its latest annual report Fletchers reported: "The plasterboard business recorded a 43 per cent increase in operating earnings in a stronger New Zealand residential construction market."
The rise in revenue has been boosted by the Christchurch rebuild.
Fletcher believes the complaint has come from a rival in the plasterboard market.
The listed company said it felt obligated to make a public statement, although an extremely short one.
"Fletcher Building has today been advised by the New Zealand Commerce Commission that it intends to inquire into its plasterboard supply arrangements with building supplies merchants.
"The company will fully co-operate with the Commerce Commission, and is confident that its supply arrangements comply with the Commerce Act."
The Commerce Commission had no comment other than to confirm the inquiry was taking place and that no comment would be made until the inquiry was complete.
The Government this year took a significant step towards limiting Fletcher Building's plasterboard power by giving German company Knauf a chunk of a $40 million plasterboard supply deal for the Christchurch rebuild. Economic Development Minister Steven Joyce welcomed the arrival of a global building supplies giant into the market.
Knauf was awarded the contract alongside Fletcher Building subsidiary Winstone Wallboards.
"The introduction of Knauf into the New Zealand market will not only save the Government up to 6 per cent in plasterboard system costs for the residential rebuild, it also has the potential to provide benefits to New Zealanders over the longer term," Joyce said at the time.
"Having Knauf set up shop in New Zealand will see increased industry competition that will provide consumers with more choice and could potentially drive down prices," he said.
Fletcher Building owns building and DYI supplier Placemakers.