Govt to regulate markets, hypermarkets

Govt to regulate markets, hypermarkets

Urip Hudiono, The Jakarta Post, Jakarta

Besides preparing better regulations on the operation of
hypermarkets in the country, the government will also empower
traditional markets to make them more competitive against giant
retailers.

Speaking at a hearing with House of Representatives Commission
VI on industry and trade on Monday, Minister of Trade Mari E.
Pangestu said the government rules on both traditional markets
and hypermarkets would only act as guidelines for regional
administrations.

"In the regional autonomy era, the implementation of the
regulation depends on policymakers at the region level," she
said.

In the proposed presidential decree, to be issued this year,
regional administrations will have more power to issue permits
for hypermarkets based on the region's development planning.

The new decree -- which will annul decrees No. 145 and 57/1997
on modern markets issued jointly by the Ministry of Trade and the
Ministry of Home Affairs -- will also forbid hypermarkets from
operating outside provincial capitals. It will also oblige
hypermarkets to build partnerships with traditional markets and
local small and medium enterprise (SME) suppliers.

Mari, however, denied that the new decree was intended to
limit hypermarkets from investing and operating in the country.
Currently, the government is identifying problems concerning the
proliferation of hypermarkets and how to address the matter.

"The government needs to focus on how we can improve
traditional markets, particularly the physical condition, the
management and supply systems," she said.

Improving traditional markets' appearance, she added, was
essential to encourage customers to shop there.

"Obviously, we have to make (traditional) markets cleaner,"
she said. "Convenience of a place influences someone to shop
either at traditional markets or hypermarkets.

"Traditional markets' management should also involve traders
in policy-making related to the markets' condition," she added.
"As for supply, the trade ministry will conduct a thorough study
on the supply chain to identify existing problems, particularly
related to illegal fees that hamper supply.

"We can also imitate and cooperate with the supply chain
system of hypermarkets for traditional markets to make their
supply chains better."

Data from the trade ministry shows that traditional markets
still make up 84 percent of the total markets in the country,
while hypermarkets make up only 16 percent.

Nevertheless, modern markets are considered to threaten the
existence of traditional ones.

To address this, some regional administrations have passed
bylaws on the operation of hypermarkets.

Jakarta, for example, has issued Bylaw No. 2/2002 on private
markets, stipulating a private market occupying 4,000 square
meters may not be built within 500 meters of a traditional
market.