The Business Competition Supervisory Commission, or KPPU, brought PT Carrefour Indonesia in for questioning on Monday as part of a probe into allegations that the French supermarket chain was operating a monopoly.
Carrefour is accused of violating a clause in the law restricting businesses from acts leading to monopolistic practices and another forbidding businesses from exploiting market dominance to control trading terms, the antimonopology agency said. The chain is alleged to have gained unfair advantage through its acquisition of PT Alfa Retailindo Tbk, which operates Alfa supermarket.
Under Indonesia’s antimonopoly laws, more than a 50 percent market share constitutes unfair advantage.
“On the upstream market, Carrefour has been dominating with a 66.7 percent share after the acquisition, up from 44.74 percent,” said Junaidi, KPPU’s communications director.
Carrefour, which operates 61 outlets across Indonesia, said it would cooperate with the probe.
“We came here as good businessmen to fulfill KPPU’s call as part the investigation process,” said Carrefour’s corporate affairs director, Irawan D. Kadarman, at the KPPU office in Jakarta.
The commission alleges that the retail market picture has been increasingly marked by a worrying trend of increased costs for suppliers following acquisitions. Carrefour, the agency said, dominates the so-called upstream market, which connects suppliers with retailers, giving suppliers few alternatives in distributing their goods to retailers.
“Based on our investigative report, we have obtained data which show that Carrefour has allegedly provided more and more space leased at expensive rates and charged expensive trading terms for suppliers of goods and vendors at its outlets,” KPPU investigator Dedie S. Martadisastra said.
Irawan denied that Carrefour’s market share violates the law. “That’s not true. We do not have market share of more than 50 percent,” the Carrefour director said.