The Commerce Commission has cleared CSR Building Products (NZ) Limited and Brickworks Building Products (NZ) Limited to establish a joint venture to supply clay bricks in New Zealand.

Commerce Commission Chair Dr Mark Berry said the Commission is satisfied that the proposed joint venture between CSR and Bricks is unlikely to substantially lessen competition in the New Zealand market for the manufacture, import and supply of clay bricks.

The Commission considers that the joint venture would face significant competition from clay bricks suppliers in New Zealand and would also be constrained by the threat of entry by Australian brick manufacturers. The joint venture would also face competition, to some degree, from other external cladding products.

A public version of the written reasons for the decision will be available soon on the Commission‘s website at www.comcom.govt.nz/clearances-register

Background

In New Zealand, CSR manufactures and supplies clay bricks under the Monier brand. CSR’s brick manufacturing plant in New Lynn would not be included in the proposed merger. Brickworks imports clay bricks into New Zealand from Australia and supplies these bricks under the Australbricks brand. The majority of clay bricks sold in New Zealand are used as exterior cladding on houses and small non-residential buildings.

When considering a proposed merger, the Commission must decide whether the competition that is lost in a market when two businesses merge is substantial. We will give clearance to a proposed merger only if we are satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market. A fact sheet explaining how the Commission assesses a merger application is available on the Commission’s website.