Carrefour objects to KPPU ruling<\/p>\n
Anissa S. Febrina, The Jakarta Post, Jakarta<\/p>\n
French giant retailer Carrefour denied in its first trial at the
\nSouth Jakarta District Court on Thursday that it has applied
\nillegal trading terms as previously ruled by the Business
\nCompetition Supervisory Commission (KPPU).<\/p>\n
Carrefour legal representative Timur Sukirno said the
\ncommission had misinterpreted one of its trading terms as an
\nunfair business practice and had imposed a groundless sanction.<\/p>\n
KPPU declared on Aug. 19 that Carrefour had carried out an
\nunfair business practice by applying a minus margin policy in its
\ncontracts with suppliers.<\/p>\n
The commission imposed a Rp 1.5 billion (US$148,515) fine on
\nthe company and demanded it stop the much-disputed terms of
\ntrade.<\/p>\n
Carrefour filed an appeal to the ruling at the district court
\non Sept. 13.<\/p>\n
Minus margin is one of the trading terms the giant retailer
\napplied to 99 of its 2,500 suppliers, in which Carrefour could
\npose sanctions if the suppliers violated their best price
\nguarantee.<\/p>\n
Carrefour has inserted the minus margin policy in its trading
\nterms since early 2004 and said that it was a negotiable term.<\/p>\n
Timur argued that the policy was legal and therefore the
\ncompany had not committed any unfair business practice. However,
\nthe company chose to no longer apply the minus margin policy.<\/p>\n
\"We feel that it has been misunderstood and feel that this is
\nnot a good time to apply such a policy,\" said PT Carrefour
\nIndonesia spokesman Joseph Buntaran, adding that his company had
\nerased the term before KPPU handed down its ruling.<\/p>\n
He also refused to mention whether similar trading terms had
\nbeen applied in the retailer's branches abroad.<\/p>\n
Carrefour is the second largest retailer in the world with
\noperations in 29 countries and global sales of 70.5 billion euro
\n(US$91.65 billion) in 2003.<\/p>\n
It entered Indonesia in 1998, opening its first hypermarket
\noutlet in Kuningan, South Jakarta. Today, there are 15 Carrefour
\nhypermarkets in the country with a total sales of Rp 3 trillion
\nin 2004.<\/p>\n
Following its success, five hypermarket operators have opened
\n54 outlets in Greater Jakarta alone.<\/p>\n
Carrefour has been under the spotlight since the Association
\nof Modern Market Suppliers (AP3MI) filed a complaint with the
\nKPPU under allegations of unfair competition.<\/p>\n
The issue, however, has been widened into protection of the
\ncountry's traditional markets from rapidly-growing hyper markets,
\nwhich have been blamed for causing smaller retail outlets to go
\nout of business.<\/p>",
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