Government to check dumping charges

JAKARTA (JP): The Ministry of Industry and Trade said on Friday that it would investigate allegations of dumping practices against foreign hypermarket operators here.

Director General of Domestic Trade Teddy Setiadi said his office would follow up claims by the Association of Indonesian Retailers (Aprindo), which accused French chain stores Continent and Carrefour of intentionally selling goods at a loss in order to eliminate competing local supermarket chains.

"If Aprindo has evidences of the dumping practices conducted by those hypermarkets, they should give it to us so we can check it directly in the field," he said.

Teddy said that as far as he knew, the foreign-owned hypermarkets were able to sell their goods at cheaper prices because they set a smaller profit margin.

With lower profit margins, the stores would be able to achieve high sales volumes, he said.

"It is not dumping. Those foreign hypermarkets, such as Carrefour and Continent, are not only backed with huge capital but also work more efficiently," he said.

Aprindo's executive director, Kustarjono Prodjolalito, said last week that Continent and Carrefour were conducting dumping practices here in an attempt to drive local supermarket chains out of business.

He said the operators were selling their products below cost prices to undercut local retailers and ultimately send them into bankruptcy.

He said that Aprindo had evidences that foreign hypermarkets were not merely offering discounts to attract buyers, but selling their products at a loss in order to kill local retail chains.

Teddy said that Aprindo should meet executives of Continent and Carrefour to discuss ways to reach a mutually beneficial solution.

"The government is trying not to interfere too far in private sector matters. So we will only help if they cannot reach a satisfactory solution," he said.

Carrefour and Continent entered Jakarta last year offering a wide variety of products, ranging from groceries to clothes and household appliances.

Their arrival followed the signing of the letter of intent between the government and the International Monetary Fund in March last year, which required the country to lift its restrictions on foreign investment in the retail and wholesale markets.(gis)