Carrefour challenges unfair business charges on Supreme Court

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.