Building material rebates dumped just ahead of Comcom report

Winstone Wallboards, the manufacturer of GIB, says it will move to a tailored, flat pricing model based on volume.
The discontinued rebates paid to retailers by building companies, such as Fletcher’s, for selling its products is one of two main factors the Commerce Commission says is hampering competition in the building supplies industry.

Another problem identified in the report was that of restrictive land covenants and exclusive leases - a problem which was also found in the supermarket study.

The rebates rewarded merchants for purchasing greater volumes through a single supplier, by offering higher percentage rebates that apply across all of that merchant’s purchases with that supplier.

The commission says while these rebate structures do not always lessen competition, they can deter merchants from stocking competing products, which makes it more difficult for new or smaller suppliers to access distribution networks and become established in the market.