Carrefour challenges unfair business charges on Supreme Court

The Jakarta Post Jakarta

PT Carrefour on Tuesday filed an appeal to the Supreme Court to challenge a lower court's and Business Competition Supervisory Commission (KPPU)'s ruling declaring the local unit of French giant 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. To the company's demise, the court on Nov. 16 rejected the appeal and ruled in favor of 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 trading term 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 its suppliers if any competitor using the same supplier manages to sell its product at a cheaper price. 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 under allegations of unfair competition late last year.