Boral wins Wagners supply case

Wagners will make less money from selling cement to Boral, its biggest customer, in future after a court ruled the Queensland construction group must match lower prices of rivals.

Justice Bond at the Queensland Supreme Court found that the notice sent by Boral to Wagners that it could buy cement cheaper from Cement Australia was "a valid and effcitive notice."

After Boral bought the Queensland group's construction materials business in 2011, it signed a "take or pay" that required it to keep buying minimum amounts of cement from Wagners' Pinkenba plant in Brisbane, reports The Australian Financial Review.

Under the terms of its take or pay agreement, Boral was allowed to stop buying cement from Wagners for six months if it found cement at a cheaper "market price" elsewhere. It could also ask Wagners to match the lower price.

Wagners had stopped supplying Boral with cement for six months at a cost of AUD20m (US$13.7m) while the matter was sorted out by the courts. Boral resumed buying cement from Wagners on 22 October 2019 but at lower prices than previously.

Wagners Chairman, Denis Wagner, said the company would continue to hold Boral to the terms of its supply agreement until its end date in 2031.