Jakarta (ANTARA News) - The Business Competition Supervisory Commission (KPPU) has ruled that PT Carrefour Indonesia committed a monopolizing act and unhealthy competition by acquiring PT Alfa Retailindo Alfa`s supermarket chain early in 2008.
"The commission rules Carrefour has proven guilty of violating Article 17 point 1 and Article 25 point 1a of the law against monopolies," the head of the KKPU`s council, Dedie S Martadisastra, said here on Tuesday.
In connection with it Carrefour has been ordered to release all its shares in PT Alfa Retailindo (75 percent) to other parties not affiliated with Carrefour at the latest a year after the issuance of the KPPU`s ruling.
Carrefour was also ordered to pay a fine of Rp25 billion.
Based on evidence collected during investigation the upstream market share of Carrefour rose to 57.99 percent in 2008 following the acquisition of Alfa shares, from 46.30 percent in 2007.
According to KPPU, the upstream market is a market of goods supplies at hypermarkets and supermarkets as well as retail service markets at hypermarkets and supermarkets in Indonesia.
The control of the market by and the dominant position of Carrefour is considered by KPPU as having been misused to cut prices of goods from suppliers through trading terms.
After the acquisition of 30 Alfa supermarket outlets the trading term cuts on Alfa suppliers rose 13 to 20 percent.
KPPU also discovered proof that Alfa suppliers had been forced to also supply Carrefour after acquisition.
KPPU earlier alleged Carrefour of violating four articles of the anti-monopoly and business competition law but it was later proven of only conducting monopoly and misusing its monopolizing position and thus creating unhealthy competition.
The charge based on Article 20 on dumping against traditional markets was not continued while the charge based on Article 28 on acquisitions and mergers though proven was not ruled because no government regulation was available on the implementation of the articles.
KPPU had advised the government to immediately issue the regulation so that it could supervise mergers and acquisitions effectively.
PT Carrefour`s communications director, Irawan Kadarman, said the company would study the KPPU ruling and appeal it.
"We will study it internally while waiting for the official notification from KPPU. But from the beginning we have remained consistent with our stance that the KPPU`s accusation is baseless and therefore we will appeal," he said.