Carrefour challenges unfair business charges at Supreme Court

The Jakarta Post Jakarta

PT Carrefour filed an appeal on Tuesday with the Supreme Court to challenge a lower court's and Business Competition Supervisory Commission (KPPU)'s ruling declaring the local unit of the giant French retailer guilty of unfair business practices.

KPPU declared on Aug. 19 that Carrefour had carried out an unfair business practice by applying a "minus margin" policy in its contracts with suppliers. The commission imposed a Rp 1.5 billion (US$148,515) fine on the company and demanded it stop the much-disputed terms of trade.

Carrefour filed an appeal to the ruling at the South Jakarta District Court on Sept. 13. The court rejected the appeal on Nov. 16 and upheld KPPU's ruling.

In a statement sent on Tuesday however, Carrefour rejected the ruling from KPPU and the South Jakarta District Court, saying both had misinterpreted the terms of trade as an unfair business practice and had imposed a groundless sanction.

"We object to the ruling and therefore we are appealing to the Supreme Court," director of corporate affairs Irawan Kadarman said in the statement.

A minus margin is a penalty Carrefour imposes on a supplier that sells its products at a lower price to a competitor of Carrefour. Carrefour has inserted the minus margin policy in its trading terms since early 2004 and said that it was a negotiable term.

The legal saga involving the company began when the Association of Modern Market Suppliers (AP3MI) filed a complaint with the KPPU citing unfair competition late last year.