ACCC boss Rod Sims says a proposed joint venture between CSR and Boral will hurt brickmaker competition.
The competition watchdog has warned a proposed brick-making joint venture between building products makers Boral and CSR is likely to hurt builders and consumers.
Australian Competition and Consumer Commission chairman Rod Sims said the joint venture would result in a duopoly in eastern Australia between Boral/CSR and Austral Bricks.
In Queensland and NSW, the two businesses would supply about 99 per cent of all bricks.
Mr Sims said that would push up costs for buyers and result in smaller product ranges.
“The ACCC’s preliminary view is that this would be likely to lead to an increase in the price of clay bricks as well as a reduction in the product range available to residential builders, architects and end-consumers,” he said.
In a statement, CSR and Boral said the venture would not substantially hurt competition and would stem the ongoing slide in profitability in the sector.
“Australian brick manufacturers have experienced a sustained structural downward trend in demand for brick products over the past 30 years,” the company said.
“The joint venture will be a more sustainable business positioned to deliver returns that recover the cost of capital through building cycles.”
The ACCC is taking further submissions in relation to the proposed joint venture and is due to announce its decision on December 18.