Indonesiaâ€™s business competition authority (KPPU) has instructed PT Carrefour Indonesia, a subsidiary of Europeâ€™s largest retailer, to sell its entire stake in a listed unit it bought in 2008 and pay a Rp25bn ($2.6m) fine.
PT Carrefour Indonesia bought 75 per cent of PT Alfa Retailindo in January last year for Rp674bn, and later increased its stake to just over 79 per cent.
Irawan Kadarman, corporate affairs director for PT Carrefour Indonesia, said the regulator had found the company guilty of holding a monopoly in the retail sector and of abusing that dominant position.
He said Carrefour has 14 working days from the date of a letter issued by the regulator – not yet received by the company – in which to appeal to the district court and one year from that date to divest, if the court finds against it. He claimed that data used by the KPPU to back up its findings is inaccurate.
â€śWe believe very strongly that their allegations have no basis. They are talking about us being dominant, about abusing our position. For us those allegations have no merit. The chances are that we will appeal.â€ť
In Indonesia, the group holds 45 stores under PT Carrefour Indonesia and 30 under PT Alfa Retailindo, all of which are branded as either Carrefour or Carrefour Express.
Benny Pasaribu, KPPU chairman, said the original complaint was brought to the regulator by small suppliers, who claimed they were being squeezed by Carrefour into giving more and more discounts.
Carrefour is by far the largest foreign supermarket player in Indonesia. PT Indonesia Makro, owned by South Koreaâ€™s second largest retailer Lotte Shopping, has 19 stores. Wal-Mart pulled out in 1998 after an ill-fated foray into Indonesia in the late 1990s, ended in a dispute with its partner Lippo Group, an Indonesian conglomerate.
One analyst, who asked not to be named, said he was unaware of any similar situations in which foreign retailers had clashed with the monopolies commission, but said friction was inevitable, â€śbecause Carrefour has got so big.â€ť
The companyâ€™s food sales in Indonesia are approximately double that of the second largest, PT Matahari Putra Prima, he said.