French supermarket chain PT Carrefour Indonesia could face a hefty penalty of up to Rp 25 billion ($2.2 million) if it is found to have been involved in unfair or monopolistic business practices, an official at the Business Competition Supervisory Commission, or KPPU, said on Thursday, after the body officially announced it was investigating allegations against the large retailer.<\/p>\n
Carrefour management strongly denied the allegations, which they said were unfounded and confused.<\/p>\n
\u201cIt is the right of the KPPU to impose sanctions within the range of Rp 1 billion to a maximum of Rp 25 billion if [Carrefour] is proven to have violated the anti-monopoly law,\u201d Ahmad Junaidi, the KPPU communications director, said on Thursday.<\/p>\n
On March 26, the anti-monopoly body revealed that it was planning to investigate allegations of monopolistic practices by the local arm of French retail giant Carrefour SA, especially accusations that the company through a 2008 acquisition could dictate terms to wholesale suppliers nationwide because of its rapid growth and recent acquisitions. The firm is also being investigated for overcharging supermarket stall holders who operate on supermarket premises for retail space, after some stall holders complained.<\/p>\n
\u2018If the KPPU makes a fuss, it could harm our investments. Where\u2019s the legal certainty?\u2019<\/p>\n
Irawan D Kadarman<\/p>\n
In January last year, Carrefour acquired a 75 percent share in PT Alfa Retailindo Tbk, a company which operates Alfa supermarkets in Greater Jakarta, Java, Bali and Sumatra.<\/p>\n
Ahmad claimed that after the acquisition of supermarket chain Alfa Retailindo, Carrefour controlled around 48.38 percent of the supply of goods to all hypermarkets and supermarkets in the country, up from 37.98 percent before the acquisition.<\/p>\n
Because they had such a position, the Carrefour\u2019s higher listing fees demanded of suppliers was hurting the wholesale sector. This cost was then passed on to supermarket customers in the form of higher-priced goods, Ahmad said. As evidence, he cited that the trading term costs for cosmetics in Carrefour stores had risen from 13.3 percent to 33 percent.<\/p>\n
Irawan D Kadarman, corporate affairs director of PT Carrefour Indonesia, told the Jakarta Globe that his company regretted that the KPPU made the announcement without having clarified the issue first with Carrefour. \u201cUp until now, we have never received any notification from the KPPU. That\u2019s why we really regret and object the KPPU\u2019s announcement,\u201d Irawan said.<\/p>\n
Irawan strongly denied the acquisition of Alfa meant the chain now dominated retail business in Indonesia. \u201cWe want to also clarify that based on independent study, the Nielsen Company, our market share is just 7 percent, not 30 percent as alleged by KPPU,\u201d he said. \u201cThe monopoly allegation is not correct.\u201d<\/p>\n
Irawan said the company had informed a number of authorities before the acquisition, and had also sent letters to the KPPU, which had not complained about the acquisition until now.<\/p>\n
\u201cI am afraid that if the KPPU makes a fuss of this issue, it could harm the our investments here,\u201d Irawan said. \u201cWhere is the legal certainty here?\u201d<\/p>\n
Sofjan Wanandi, the chairman of Indonesian Employers Association, Apindo, said he was worried that the allegation would endanger the image of Indonesia as an investment destination.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/anti-monopoly-board-says-carrefour-faces-millions-of-dollars-in-fines-1238722536", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }