Commerce Commission study announced for building supplies market

The Commerce Commission is set to undertake a market study into residential building supplies for major components of residential buildings 

On 22 November 2021 the Minister of Commerce and Consumer Affairs announced a market study to assess factors that may impact competition in the New Zealand market for the supply and acquisition of building supplies used for residential buildings.  These include flooring, insulation, roof, and structural and non-structural walls (both interior and exterior).  The study recognises that residential buildings play an important role in New Zealand’s construction industry as well as ensuring that the ever-growing housing supply can meet the demand. 

The full announcement can be accessed here.

Scope of market study into residential building supplies

As part of the announcement, the Minister has released Terms of Reference which describe the various factors that the Commerce Commission (Commission) must consider in carrying out the study.  These include, but are not limited to:

  • The structure of the residential building supply industry for key supplies covered by the study;
  • The nature of competition for these key building supplies (including industry pricing practices or acquisition requirements that are likely to impact competition); and
  • Impediments to the entry or expansion of new innovative building supplies, including “green” building supplies or novel prefabricated products.

In directing the Commission to carry out the study, the Minister has identified a number of factors the Government considers may be impacting competition, including:

  • A highly concentrated market for some building supplies;
  • A high level of vertical integration in the supply chain;
  • A lack of transparency in the pricing of building supplies, including the use of rebates and loyalty schemes; and
  • Difficulties faced by new building supplies entering the New Zealand market.

Next steps

The Commission will be required to engage with and send general information requests to a range of stakeholders in the building and construction industry as part of the study.  The indicative timeframe for the study is as follows:

December 2021Commission expected to release a Preliminary Issues Paper
Early 2022Information gathering / engagement with stakeholders
July 2022Draft consultation report issued by Commission
6 December 2022Final report to be made available

The findings of the study will help to inform any changes the Government wishes to make to enhance performance and public/consumer confidence in the residential building supply industry.  Although the Commission’s findings are non-binding, the market study was foreshadowed in Labour’s 2020 Election Manifesto, and the Government will be required to consider and respond to any recommendations made by the Commission within a reasonable time frame after the final report has been made available to the public.

This will be the third market study undertaken by the Commission, with the first market study taking place in December 2019 which looked into retail fuels, and the second market study (which is currently ongoing) looking into the retail grocery sector. 

We will provide a further update once the Preliminary Issues Paper has been released.  If you would like to discuss the Commission’s market study please get in touch with our Business Advice Team or Construction Team or your usual contact at Hesketh Henry.


Disclaimer:  The information contained in this article is current at the date of publishing and is of a general nature.  It should be used as a guide only and not as a substitute for obtaining legal advice.  Specific legal advice should be sought where required.




Do you need expert legal advice?
Contact the expert team at Hesketh Henry.
Media contact - Kerry Browne
Please contact Kerry with any media enquiries and with any questions related to marketing or sponsorships on +64 9 375 8747 or via email.

Related Articles / Insights & Opinion

Supreme Court Confirms Commissions Within Weekly Holiday Pay
The Supreme Court has upheld the Court of Appeal’s decision (although for different reasons) in A Labour Inspector of the Ministry of Business, Innovation and Employment v Tourism Holdings Limited w...
21.12.2021 Posted in Business Advice & Employment
Hesketh Henry ranked in the latest Asia-Pacific Chambers Legal Directory 2022
Henry has received the following recommendations and commentary in the high-profile Asia-Pacific Chambers Legal Directory for 2022
2021 Maritime Arbitration Enforcement Series.
The Hesketh Henry Trade and Transport team are proud contributors of the SCMA (Singapore Chamber of Maritime Arbitration) 2021 Maritime Arbitration Enforcement Series.  Authors Simon Cartwright, Part...
20.12.2021 Posted in Trade and Transport
Incorporated Societies – A Major Shake Up is on the Way
The Incorporated Societies Bill (Bill) had its second reading on 17 November 2021.  The Bill seeks to repeal and replace the 113 year old Incorporated Societies Act 1908 (1908 Act), in a well overdue...
07.12.2021 Posted in Business Advice
Are you ready for the new Covid-19 Protection Framework?
Parliament has been racing through COVID-19 legislation in preparation for New Zealand entering the COVID-19 Protection Framework (CPF) at midnight tonight, Thursday 2 December.   Employers operating...
02.12.2021 Posted in Business Advice & COVID-19 & Employment & Health & Safety
Covid-19 Risk Assessment – Vaccines only part of the solution
Vaccine mandates have been the “hot topic” in the news recently.  However, it has become clear that vaccines are not a silver bullet and relying on vaccination alone to address the risk of Covid-...
01.12.2021 Posted in COVID-19 & Employment & Health & Safety
Final changes to the overseas investment regime now in force
The Overseas Investment Amendment Act 2021 came into force on 5 July 2021.
24.11.2021 Posted in Business Advice & Foreign Investment & Property
Send us an enquiry
For expert legal advice, please complete the form below or call us on (09) 375 8700.
  • This field is for validation purposes and should be left unchanged.