Fletcher system slammed as unfair

Photo / Mark Mitchell

Another industry player joins calls for change over company’s dominant position in plasterboard market.

Another construction industry player has criticised Fletcher Building's dominant position in New Zealand's plasterboard market via its Winstone Wallboards.

Geoff Tully of lightweight steel framing business Gammabracing said he had observed the situation and backed calls for change.

That follows criticism from Kevin van Hest of Elephant Plasterboard in Glendene and Coen Willemse who worked on houses in Christchurch, both saying they had seen how sales of non-Gib products were limited.

Van Hest said suppliers were shy about stocking or selling alternatives to Winstone's Gib because they had strong financial reasons not to.

They got rewards including invitations to sporting and other events, overseas trips and financial payments, van Hest claimed.

The situation is under investigation by the Commerce Commission which is yet to release its findings.

Tully said he had been following other people's comments because he believed anti-competitive practices were dogging the sector.

"We were the importers of BPB Plasterboard [Thai Gypsum] throughout the mid 1990s and into the late 2000s before we sold the operation on to the McConnell Group," Tully said.

"We can concur fully with Mr van Heist and can certainly add to his view of events over that period of time."

Many protection mechanisms were used against competitors, from technical to fundamental financial support of industry organisations, he claimed.

"One of the questions that needs to be asked is why Fletcher representatives are on most industry boards of governance, such as standards and construction research organisations," Tully asked.

Philip King, general manager of investor relations and capital markets at Winstone's parent company, Fletcher Building, said the system actively rewarded those building supply merchants who sold the Winstone board, but there was nothing wrong with that.

"Rebate structures are prevalent in most industries, not just building materials, and in reality amount to price competition, with supply terms being based on volume and the duration of contractual relationships," King said.

"Fletcher Building is confident its arrangements are not anti-competitive and do not breach the Commerce Act and ... we aim to prevent any potential anti-competitive conduct," King said.

David Thomas, Winstone general manager, said the business had a 94 per cent market share because it manufactured and delivered the best product to customers.