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)