The Building Industry Federation is calling the Housing minister’s claims the building materials supply industry is far too uncompetitive an exaggeration.

Phil Twyford says the industry is rife with rorts and anti-competitive practises, and has promised a crack down once the Commerce Commission has stronger powers to investigate.

But Federation CEO Bruce Kohn says margins in most areas of supply are tight.

He says any investigation of the supply chain is more likely to show up extreme concern about the entry of noncompliant products from offshore than pricing practices reflective of rorts and anti-competitive practices.

"The reality is that the sector is very competitive. I don't think you'd find any of our supply chains, other than one or two companies with strong market position, who are in fact making a reasonable return on income and investment."