Businessmen oppose sales regulation

JAKARTA (JP): The Indonesian Retailers Association expressed yesterday strong opposition to a suggestion from a group of store-owners, called AP3I, that the government regulate sales to prevent a price war among retailers.

"Regulating sales is contrary to the spirit of deregulation and the market mechanism, which the government has been promoting," H.E. Dachlan, the association's chairman pointed out.

Dachlan was commenting on a recent letter from the AP3I, which asked the trade minister to regulate discount sales because such a sales campaign had tended to turn into a price war among retailers.

The AP3I also suggested that the government allow foreign retailers to operate in the country through joint ventures to help domestic retailers enter the international market.

However, the association argued yesterday that the price discounts granted by retailers are still within normal business practices and can by no means be considered dumping.

"Regulating sales, as suggested by the AP3I, is entirely against the deregulation and market economy which has been promoted by the government over the past 10 years," Dachlan said.

He argued that both big retailers, such as department stores and supermarkets, and small retailers get price discounts from suppliers.

"That way, both groups of retailers would not be, in any way, engaged in a price war, especially because small shops, which mostly use a bargaining system and not fixed-price sales system, have more business flexibility," Dachlan added.

He also saw the suggestion to allow foreign retailers in as strange because that is not the way to develop the domestic retail service.

Moreover, Dachlan argued, several foreign retail chains have entered the country through franchise agreements with local companies.

Retailers will open a two-day sales bazaar near the Sarinah shopping center on the Thamrin thoroughfare on Aug. 5, in light of celebrating the 50th anniversary of Indonesia's National Independence Day.

The bazaar, which will offer price discounts of up to 50 percent, will be opened by Mrs. Tien Soeharto, the country's First Lady. (vin)