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Dulux, Resene, Valspar win $90m Chch paint contract

BUSINESSDESK: Dulux Group, Resene Paints and Valspar Corp have won a $90 million government contract to supply eight million litres of paint for use in rebuilding houses in Christchurch.

The companies will jointly supply the paint in one of the biggest such tenders ever awarded in New Zealand.

That is enough paint for 100,000 houses requiring $10,000 to $100,000 worth of repairs, says the Industrial Consumables Christchurch Reconstruction - Paint tender posted on the Government Electronic Tender Service website.

Based on eight million litres of paint, "the associated dollar value is about $80 million to $90 million," Ministry of Business, Innovation and Employment spokeswoman Tracey Dillimore told BusinessDesk. It received five bids for the tender, but two were non-compliant.

Paint has been a sticking point in the rebuild, with the Canterbury Master Painters Association labelling the original tender as "immoral and anti-competitive" for shutting out small businesses and erasing their margins.

Chairman Paul O'Donnell told BusinessDesk the association plans to oppose the government contract through Can Trades, a lobby group formed in July amid concern the government's management of the $20 billion-plus rebuild is slashing their earnings and favouring big business.

"This is totally anti-competitive and the total saving by the government is negligible," Mr O'Donnell says.

Can Trades is made up of master plumbers, master painters and master builders.

 

Comments and questions
3

Thats equivalent to $1 per litre of paint, or thereabouts; and there'd be a margin left in that.

Shows the margins paint maufacturers and sellers enjoy.

Surely the paint packaging, distribution and selling doesnt cost $7 to $15 per litre, and thats on trade prices.

Another welcome to ripped NZ consumers.

if I do calculations right, $90m/8m liters = $11 approx. per l, not $1 :)

I would put it to you some of the larger painting companies are buying their paint at a cheaper $/L. For the Government to sign this deal they must to getting a pretty good back hander from the paint suppliers?