CSR owner Saint Gobain faces market power claim over Covid-19 era insulation price hikes that sent builders to the wall

The CSR parent is the target of one of the first section 46 claims to be lodged relating to alleged abuse of market power during Covid-19. The building industry will be watching the action closely.

French conglomerate Saint Gobain faces allegations of abuse of market power from Perth based building distributor Consolidated Energy in a new Federal Court claim.

The action centres on insulation price increases by Saint Gobain subsidiary CSR in 2021 and 2022 at the height of the Covid-19 price hikes which sent some builders to the wall.

Saint Gobain acquired CSR last year for $4.3bn.

The abuse of market power case follows an initial claim last year in which Consolidated Energy (formerly Australian Gypsum) successfully sought internal CSR company documents to back its allegations of potential market manipulation.

At the height of Covid-19, there were only two suppliers of home insulation, CSR and Fletcher, with importer Knauf facing logistic difficulties.

Benoit Bazin, Saint-Gobain‘s global boss, acquired CSR. Picture: Nikki Short

CSR in its investor presentations at the time said it was enjoying increased volumes and improved operating leverage which continued through to 2022.

A hearing date has yet to be notified in the matter lodged late last week.

It is one of the first section 46 claims to be lodged relating to alleged misuse of market power during Covid-19.

At the time, many builders on fixed price contracts were forced to close after local suppliers hiked prices.

The ACCC has yet to pursue any Covid-19 legal claims to do with the building industry.

But separately, the competition regulator is close to lodging its long-awaited case against Google for alleged dealings with Samsung to be the default search operator on its mobile phones.

Last year, the ACCC reached deals with Telstra, Optus and TPG who undertook not to reach search default deals with Google.

The ACCC said in a statement it became aware of agreements that Google had initiated and entered into with Telstra and Optus, which meant Google’s search services were pre-installed as the default application on Android devices supplied by these companies.

The undertakings come in the wake of US claims Google in 2022 paid Apple $US20bn to ensure it was the default search engine on its phones.

Google search itself is under threat from artificial intelligence, which looms as the potential destroyer of the search business, also the basis of its data collection and advertising dominance.

Google controls an estimated 98 per cent of search.

King & Wood Mallesons is acting for Google ahead of the expected ACCC action, which has been in the works for a year or more.

The ACCC declined comment on the matter which is due to be lodged in July.