Big retailers want clear regulation<\/p>\n
JAKARTA (JP): The Association of Indonesian Retailers asked
\nthe government yesterday to take into account different economic
\nlevels of regency towns in its plan to limit big retail
\noperations.<\/p>\n
The association's chairman, Steve Sondakh, and director
\nexecutive, Kustarjono Prodjolalito, said the government should
\nclearly define which regency towns were out of bounds for big
\nretailers.<\/p>\n
They said some regency towns were economically developed or
\ntourist destinations so needed the presence of big retailers.<\/p>\n
"Are we going to ban big retailers in towns like Balikpapan
\n(East Kalimantan), Batam (Riau), Bogor (West Java), Depok (West
\nJava), Bekasi (West Java), to name a few?" Sondakh asked.<\/p>\n
Sondakh is also president of Hero, one of Indonesia's biggest
\nsupermarket chains.<\/p>\n
President Soeharto recently instructed the Ministry of
\nIndustry and Trade, the Ministry of Home Affairs, and the
\nInvestment Coordinating Board to issue a regulation limiting the
\noperation of big retailers in regency towns to protect small
\nretailers.<\/p>\n
The coordinating minister for production and distribution,
\nHartarto, said the regulation would be completed in two months.<\/p>\n
"Big retailers who have operated in regency towns are called
\non to cooperate with cooperatives," he said.<\/p>\n
Kustarjono said more than 100 big retail outlets operated in
\nregency towns.<\/p>\n
Analysts see the decision as political rather than economic.<\/p>\n
They said it is part of the government's strategy to win the
\npeople's sympathy ahead of the general election.<\/p>\n
Some businessmen, including tycoon Sudwikatmono, who owns the
\nGolden Truly chain, praised the decision.<\/p>\n
He said the decision would make big retailers focus their
\nexpansion on provincial towns or abroad, leaving small retailers
\nto prosper in regency towns.<\/p>\n
"Golden Truly will not open outlets in regency towns," he
\nsaid.<\/p>\n
But Kustarjono warned that protection would make small
\nretailers uncompetitive and that they would not survive once the
\nASEAN free trade area started in 2003.<\/p>\n
"That's why the decision should be followed by government
\nmeasures to educate small retailers," he said.<\/p>\n
He said traditional markets where small retailers mostly
\noperated had failed to compete with big retailers mainly because
\ninadequate government support in improving their management
\nskills.<\/p>\n
A spokesman of the Jakarta administration-owned market company
\nPD Pasar Jaya, Lihardi Sipayung, said the government did not have
\nenough money to manage traditional markets to the point that they
\ncould compete with big retailers.<\/p>\n
He said small traders had become less competitive because big
\nretailers paid less for their merchandise.<\/p>\n
Small retailers bought goods from sub-agents while big
\nretailers bought directly from producers, he said.<\/p>\n
If the government wanted to promote small traders it should
\nmake laws ensuring small traders had equal access to producers,
\nhe said. (jsk)<\/p>",
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