The Commerce Commission says rebates paid by major suppliers to merchants is making it difficult for new or competing products to grow in the building sector
In its final report into the residential building supplies industry, the commission says familiar products have become embedded in building homes in New Zealand.
The regulator recommends the building regulatory system should include competition as an express objective.
It also recommends better serving Māori through the building regulatory system and creating better compliance pathways for a broader range of building supplies.
The commission recommends exploring ways to remove impediments to product substitution and variations.
Commission chair John Small said land covenants and exclusive leases that benefit merchants would be the focus of further work.
Following the report, plasterboard supplier Winstone Wallboards said it would remove its rebates structure.
Winstone Wallboards was the focus of some focus in the commission's market study of the residential building supplies sector.
The company, owned by Fletcher Building, is New Zealand's only domestic manufacturer of plasterboard.
Fletcher Building said it has been advised the commission has opened another investigation into Winstone's use of rebates.
The rebates were a volume incentive, where a customer receives a better rebate if they buy pre-agreed volumes over a period of time.
Fletcher said it will review the rest of the commission's final report in due course.
