Key takeaways:
- In 2014 the New Zealand Commerce Commission (NZCC) did not find breaches of the Commerce Act by Winstone Wallboards, New Zealand’s only plasterboard manufacturer.
- The NZCC is currently considering the plasterboard sector in its market study into residential building supplies.
- The Government has now also set up a taskforce to investigate plasterboard shortages. This announcement shows urgency.
- New Zealand’s monopolisation test will change from 5 April 2023.
New Zealand’s Minister for Building and Construction has set up a Ministerial taskforce to look at what can be done to ease plasterboard shortages. Winstone Wallboards, a subsidiary of Fletcher Building, supplies plasterboard brand “GIB” and currently makes up around 95% of the New Zealand market. Winstone Wallboards has not been able to keep up with demand leading to shortages in plasterboard supply.
The Minster explained “The taskforce has a very clear aim, to increase sector productivity as quickly as possible, and to remove any unnecessary barriers, including around certification, to facilitate the use of different types of plasterboard. I will convene our first meeting next week,“. The Government’s media release indicates the taskforce will:
- “Troubleshoot the regulation of alternative plasterboard products, including examining whether legislative change or regulatory change is needed
- Look at ways to streamline the use of products that are currently untested in the New Zealand market
- Explore new distribution models
- Provide advice regarding the appropriate approach to consenting
- Act as a forum for related supply chain concerns”
This is an urgent initiative as, at the same time, the NZCC is still undertaking its market study into residential building supplies, as directed by the Government. Plasterboard is one of three key building supplies the NZCC has identified which it will study more closely.
In 2014 the NZCC had previously investigated allegations Winstone Wallboards had acted anti-competitively to maintain its market position in the manufacture and supply of plasterboard but had not found evidence to suggest Winstone Wallboards had breached the Commerce Act. The investigation was centred around alleged agreements with merchants, rebates paid to merchants, and alleged undercutting of other plasterboard suppliers on jobs. The monopolisation law applicable at the time will soon be changed, as New Zealand’s monopolisation law will change from 5 April 2023, moving to an effects test like Australia.
Market participants will be watching closely to see what action is taken in the present day plasterboard and wider building products sector. The grocery market study has shown the Government is willing to go further than the NZCC, with the Government’s announcement it will develop a mandatory wholesale grocery access regime as a backstop for the voluntary regime recommended by the NZCC.