Stockholm, December 1, 2025 — The Swedish authority says widespread use of retroactive rebates in the building-materials sector is a key factor behind long-standing pricing opacity, urging public buyers to adopt stricter contract terms to curb hidden costs.
Findings on rebate practices
In a detailed mapping of pricing and rebate structures in the electrical and HVAC installation segments, the authority found that retroactive rebates — paid by wholesalers to installation companies after the fact — reached about SEK 4.4 billion in 2023. The authority says the rebates allow installers to present inflated material costs because public buyers often lack visibility into the final rebate amounts.
The practice is most problematic in cost-plus construction projects, common in public procurement for hospitals, transport infrastructure and other complex facilities. According to the authority, installers can choose from multiple price lists at wholesalers, enabling them to report higher or lower material costs selectively. The investigation concludes that this practice occurs repeatedly across the sector.
Risks for public buyers
When substantial portions of material costs are repaid later as rebates, public buyers may end up covering overstated material expenses and higher contractor fees. The authority warns that such hidden returns distort cost reporting and expose the public sector to unnecessary expenses.
Proposed measures
The authority does not recommend regulating contractual freedom but says public buyers should lead a shift away from rebate-dependent pricing. It proposes that public buyers:
- Prioritise fixed-price contracts.
- Pre-define material prices when cost-plus models are used.
- Include clear clauses requiring all rebates to flow to the public buyer, supported by stronger contract monitoring.
To further increase transparency, the authority proposes a new rule obliging suppliers to disclose all rebates on building materials directly on invoices issued to public entities.
The authority also calls for strengthened procurement guidance and training, suggesting the government mandate appropriate bodies to coordinate support for public buyers.
