Google

ASEANAFFAIRS
Sign up | Log in

    ASEAN PROFILES

  ASEAN KEY DESTINATIONS

NEWS UPDATES 
 15 Apr 2009

Related Stories

March 31, 2009
Indonesia's coal firm reports  ten-fold rise in profit

March 30, 2009
Indonesia’s state firms join geothermal plant construction

March 24, 2009
Indonesia's Bakrie to build offshore gas pipeline

March 18, 2009
Indonesian state oil firm to pick gas block partners in a month or two

March 15, 2009
Indonesia’s top telecom firm to launch iPhone 3G   

Carrefour Indonesia shrugs off monopoly allegations

The first hearing between retail giant PT Carrefour Indonesia and the anti-monopoly watchdog on possible monopolistic business practices allegedly practiced by Carrefour, ended in stalemate as both have different starting points, reported the Jakarta Post.

Carrefour told Monday’s hearing that they did not have a dominant position in the market, while the Business Competition Supervisory Commission (KPPU) took another opinion, based on their preliminary investigation report.

“We have told the commission that we do not have a dominant market share because ours is still under 50 percent, (which) means that we have been complying with the existing regulations” said  Irawan Kadarman, Carrefour’s corporate affairs director, after the hearing.

Irawan said he based his arguments on AC Nielsen’s recent research that, after its acquisition of supermarket operator PT Alfa Retailindo (Alfa), Carrefour’s market share was only seven percent.

The figure is much lower than the KPPU’s finding which shows that Carrefour’s downstream market share soared to 48.4 percent from 38 percent while its share on the upstream market soared to 67 percent after acquisition of Alfa in January,  up from 45 percent.

The latter figures from KPPU suggest Carrefour may have violated anti-monopoly law (5/1999), which stipulates that a market share of 50 percent [or more] indicates possible  monopolistic practices.

Monday’s hearing was part of a KPPU  preliminary investigation following a report on the retailer’s alleged dominant position leading to monopolistic practices and unfair bargaining power vis a vis suppliers.

KPPU’s Commissioner Dedie Martadisastra, the investigation team leader, said that Carrefour and Nielsen were using different criteria for determining market shares.

“We have clarified our data to Carrefour’s representatives and they said that they would take this into consideration and would decide within the near future whether to accept or reject it,” he added.  

Dedie said that the commission would give Carrefour a chance to change its current business practices by May 13.

“If by that time Carrefour follow our proposal, we will stop the investigation. Otherwise we will move on to the next phase,” Dedie said.

Commented on the dispute, Indonesian Modern Market Supplier Association (AP3MI) chairman Susanto told The Jakarta Post: “Regardless of the fact that measuring the upstream market share is a complicated matter, it is a fact that Carrefour’s bargaining power has been increasing after the acquisition,”

“Carrefour’s exploitation of power was evident in the way it forced suppliers to pay for a major opening fee after the acquisition, while there was a regulation prohibiting such one-sided charges,” Susanto said.

He added that most of the suppliers agreed to pay the fee because if they refused to do so then Carrefour would simply terminate their trading relations and they would lose business.

According to the KPPU, the exploitation of bargaining power is indicated by a worrying trend towards increased additional costs such as promotional fees, and listing fees charged to the suppliers.

The commission will call other stakeholders such as suppliers and other retailers in the next few weeks, according to Dedie.





 

 

 

Comment on this Article. Send them to  your.views@aseanaffairs.com

Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited

 
or
submit your comment in the box below 

Name

Name


Email

Email



1.  Verifier

1. Verifier

For security purposes, we ask that you enter the security code that is shown in the graphic. Please enter the code exactly as it is shown in the graphic.
Your Code
Enter Code

Home | About Us | Contact Us | Special Feature | Features | News | Magazine | Events | TV | Press Release | Advertise With us

Our Products | Work with us | Terms of Use | Site Map | Privacy Policy | Refund Policy | Shipping/Delivery Policy | DISCLAIMER |

Version 5.0
Copyright © 2007-2015 TIME INTERNATIONAL MANAGEMENT ENTERPRISES CO., LTD. All rights reserved.
Bangkok, Thailand
asean@aseanaffairs.com