USG and Other Drywall Makers Accused of Price Fixing

We reported last October that the cost of Drywall was due for another spike this year. That one is coming on top of a large spike in 2012 in the middle of one of the largest recessions in our careers.  We wondered how the Drywall industry would respond and now we know.

According to Top Class Actions.com, “An Arizona-based drywall company has filed a class action antitrust lawsuit against nine major drywall manufacturers accusing them of conspiring to fix and raise the prices for gypsum board, also called drywall or sheetrock. The defendants collectively control 99 percent of the gypsum board sold in the United States and Canada, according to the class action lawsuit.

“Sierra Drywall Systems Inc. alleges in the drywall price-fixing class action lawsuit that Georgia-Pacific LLC, American Gypsum Company LLC and seven other defendants forced consumers to pay inflated drywall prices starting in January 2012 with a large, coordinated price hike.  The price-hike also included new restrictions on the supply of gypsum board made available to distributors.”

One of the defendants in the lawsuit is USG Corporation.  An interesting aspect of this issue is that, according to Bloomberg, the largest shareholder in USG is Warren Buffet’s Berkshire Hathaway Inc. (BRK/A).  The response from BRK/A was that the suit was groundless.

The suit was filed as Sierra Drywall Systems, Inc. v USG Corporation, et al.  The case number is 12-cv-9949 and it was filed in the US District Court, Northern District of Illinois (Chicago).

We will track this suit as it potentially has a major impact on the announced price increases for 2013.