The Commerce Commission's draft report into building supplies has found out what many Kiwis already know - that a lack of competition is driving prices up.
The report also highlighted the widespread use of rebates or incentives to ensure client loyalty.
First, it was petrol, second, it was supermarkets, and now, our multi-billion dollar building sector's gone under the Commerce Commission's microscope.
The watchdog released its draft report into building supplies to find out if we're getting a fair deal. Its conclusion: not really.
"We found that competition isn't working as well as it could," said chair Anna Rawlings.
Jeremy Wang, from building supplies merchant Baier Group, says that isn't anything new.
He's been importing alternative products for nearly two decades.
"It's definitely an unfair playing field," he said.
The Commerce Commission's come up with eight recommendations, ranging from adjusting our regulatory systems for better product access to removing covenant clauses tying people to certain materials, and there's one recommendation that's piqued the Government's interest the most.
That recommendation is around rebate schemes used by some of the sector's biggest players to lock in loyalty. They could be cashback bonuses for purchasing in bulk or all expenses paid trips or continued business. The report says that limits competition.
"We had our board in some of the bigger chain stores then all of a sudden they said, no, we can't stock your board, and I believe that's because of the rebate system," said Wang.
Building and Construction Minister Megan Woods said the report "laid bare some of the practices that could be contributing, undoubtedly contributing to why it's so hard for new entrants to enter the market".
The Government's not planning on taking any action now, instead waiting for the final report due in December. So in the meantime, it's asking industry players to think about their actions.
"There are some clear signals for people in the sector to think about their behaviour, to review their behaviour explicitly in some cases," said Commerce and Consumer Affairs Minister David Clark.
National's building and construction spokesperson Andrew Bayly is fired up.
"The Government minister should be right over the top of these and not hoping a single report is going to solve stuff and people are going to start behaving better."
It's just a telling-off for now, but the industry has been put on notice.
