DuluxGroup has withdrawn its paint products from Masters and Danks stores to work more closely with other retailers.
The decision was in response to US-owned paint competitors becoming more closely aligned with resellers in Australia, DuluxGroup said in a statement on Thursday.
"Dulux Australia has determined that, by doing the same with its key retail paint channel partners, it will put itself in the best position to compete strongly against its competitors and maximise sales of its key paint brands over the long term," the company statement said.
DuluxGroup said premium paint and woodcare products, including Dulux and Cabot's, would no longer be sold at Masters and Danks corporate stores.
Paint sales to Masters and Danks represented about 1 per cent of total sales, and the decision would not have a material effect on the company's financial performance, DuluxGroup said.
The Masters hardware chain - a joint-venture between Woolworths and US-based Lowe's Companies - competes with Wesfarmers-owned Bunnings, which has the biggest share in the Australian home improvement market. The joint-venture acquired hardware distributor Danks Holdings in 2009.
DuluxGroup chief executive Patrick Houlihan said Masters and Danks would continue to be offered other products such as Selleys and Yates.
"Masters and Danks corporate stores remain a valued partner for DuluxGroup's broader retail hardware business," Mr Houlihan said.
In 2011, Bunnings stopped stocking paint from US giant Valspar, including leading Australian brand Wattyl, favouring products from rivals Dulux and Taubmans.
Valspar is the major supplier of paint to Lowe's hardware chain in the US, and also supplies paint to Masters in Australia.
DuluxGroup shares closed down 19¢, or 4 per cent, at $4.61.