Wed, 11 Mar 2009
From: The Jakarta Globe
By Arti Ekawati & Teguh Prasetyo
A dairy industry association on Tuesday denied allegations by the country’s antimonopoly watchdog that the industry has put together a contract to monopolize the trading of fresh milk.

Teguh Boediyatna, chairman of the National Milk Council, an association established by dairy processors, said the All-Indonesia Dairy Cooperatives Union, or GKSI, was not forcing dairy farmers to sell their fresh milk only to member cooperatives.

To an earlier charge by the Business Competition Supervisory Commission, or KPPU, that the cooperatives union was seeking to channel all milk distribution and sales to its members, Teguh said the GKSI was only seeking to ensure constant fresh milk supply and distribution.

The GKSI oversees
90 member cooperatives supplying 1.3 million liters of fresh milk daily

“The GKSI itself, which was established by a group of dairy farmers, has been facilitating small-scale farmers in selling their fresh milk to dairy processing firms,” Teguh said. “It must be made clear first that the GKSI is not only focusing its activities on directly selling fresh milk to dairy firms but that the union is also facilitating farmers and dairy firms in buying and selling.”

Many “small- and medium-scale dairy farmers still need the continuing assistance and help of the cooperatives union in marketing and improving product quality,” he said.

The GKSI oversees 90 member cooperatives supplying 1.3 million liters of fresh milk daily to five large processing firms. Of that, 144,000 liters are supplied directly from farmers that receive mentoring from the association, he added.

Ahmad Junaidi, the KPPU’s communication director, said last week that the commission would summon the GKSI and other players to probe whether the cooperatives union had sought to lock up milk production.

The agency said its investigations raised suspicions that a contract between the GKSI and the Milk Processing Association signed last week could result in a monopoly.

“Upon studying the case, we have made recommendations to prevent the GKSI from creating a monopoly through its purchase contracts,” Ahmad said.



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