Businessmen oppose sales regulation

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)