KPPU monitors food giants Indofood, Bogasari

KPPU monitors food giants Indofood, Bogasari

JAKARTA (JP): The Indonesian antimonopoly watchdog said it was
looking into alleged unfair business practices of food giants PT
Bogasari Flour Mills and PT Indofood Sukses Makmur, and would
announce its findings in two weeks.

Chairman of the Business Competition Supervisory Committee
(KPPU) Mohammad Iqbal said on Wednesday the two companies were
currently under the scrutiny of the group's special team led by
Syamsul Maarif, a member of the 11-member commission.

"If the team finds indications of unfair business practices,
we will look further into the case by calling for a hearing, and
even conduct a direct investigation," he said after KPPU's
meeting with Vice President Hamzah Haz.

Iqbal said Bogasari and Indofood were being monitored for
their suspected violations of the 1999 Antimonopoly Law,
including controlling the whole chain of production from
providing raw material to the processing of food.

They are also being monitored for controlling a majority
segment of the market, which according to Iqbal, is most
susceptible to unfair business practices.

"For example we will investigate whether they have set up
entry barriers for newcomers to the industry. This is against the
law," he said.

Bogasari controls 90 percent of Indonesia's wheat flour
market, while the publicly listed Indofood controls 90 percent of
the country's instant noodles market.

The commission was established in June last year by former
president Abdurrahman Wahid following the enactment of the
Antimonopoly and Unfair Competition Law No. 5/1999.

The commission has the right to investigate and sanction
businesses that are suspected of unfair practices.

Early this year, KPPU announced that it would investigate
eight companies controlling more than 50 percent of the market
share of their respective products.

Besides Indofood and Bogasari, the other six companies are PT
Inti Boga Sejahtera, which controls 60 percent of the country's
cooking oil market; PT Aqua Golden Mississippi, which holds an 83
percent market share in the mineral water market; PT Unilever
Indonesia, which holds a 58 percent share in the detergent
market; PT Santos Jaya Abadi, which controls 50 percent of
Indonesia's instant coffee market; PT Asahimas Flat Glass, which
controls 65 percent of Indonesia's glass market; and state oil
and gas company Pertamina, which controls 60 percent of the
country's lubricating oil.

Iqbal reported on Wednesday KPPU's progress, after one year of
its establishment, to the Vice President.

He was accompanied by KPPU deputy chairman Pande Radja
Silalahi, and members Bambang P. Adiwiyoto, Tadjuddin Noer Said
and Syamsul Maarif. (tnt)