Carrefour fined Rp 1.5b for unfair competition

Carrefour fined Rp 1.5b for unfair competition

Urip Hudiono, The Jakarta Post/Jakarta

The Business Competition Supervisory Commission (KPPU) ruled on
Friday that PT Carrefour Indonesia was guilty of misusing
contract terms with its suppliers in order to obstruct the
latter's businesses, and fined the French-affiliated retailing
giant Rp 1.5 billion (US$1.5 million).

The KPPU, however, dropped other charges from the Association
of Modern Market Suppliers (AP3MI) that Carrefour had also
misused its "minus margin" terms and had taken advantage of its
dominant market position to exert unfair "listing fee" terms on
its suppliers.

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. The "listing fee" is a sum
suppliers have to pay to get their products displayed on
Carrefour's shelves.

KPPU's panel for the case -- Tadjuddin Noer Said, Bambang
Purnomo Adiwiyoto and Mohammad Iqbal -- concluded after examining
17 witnesses, five experts and related documents that Carrefour
had breached Article 19 of Law No. 5/1999 on anti-monopoly.

"Evidence of this is that the 'minus margin' terms had
resulted in one of Carrefour's suppliers terminating its business
with its competitors for fear of being penalized under these
terms," panel chairman Tadjuddin said, adding that KPPU also
ordered Carrefour to terminate use of such conditions.

The legal dispute between Carrefour and AP3MI began last
October when the hypermarket decided not to display two products
supplied by PT Sariboga Snacks for reasons that they failed to
meet Carrefour's standards, even though Sariboga had already paid
Rp 47.3 million as a listing fee.

The AP3MI, on behalf of Sariboga, then filed a complaint
against the hypermarket after Sariboga went bankrupt and was
refused a refund of the listing fee.