Monopoly Watch files a petition against Indofood

Monopoly Watch files a petition against Indofood

Sari P. Setiogi, The Jakarta Post, Jakarta

Monopoly Watch, a non-governmental organization on the look
out for monopoly practices, filed a petition on Tuesday to the
Indonesian Commission for the Supervision of Business Competition
(KPPU) against PT Indofood Sukses Makmur Tbk over suspicions of
monopoly.

"We have just asked KPPU to audit the company and find
concrete evidence of its monopolistic practices and concurrent
positions in its management," executive secretary Samuel
Nitisaputra told the media following a meeting with KPPU
executives.

Monopoly Watch claimed that Indofood, a leading Indonesian
food producing company, was involved in monopolistic practices
because the company and its sister companies dominate a vertical
chain of business beginning from the production of raw materials
to packaging and distribution.

It also said that Indofood dominated the instant noodle market
by 75 percent, wheat by 66.7 percent, cooking oil by 60 percent,
industrial margarine by 50 percent and snacks by 55 percent.

"A director of Indofood also holds similar positions or at
least top management positions in sister companies," said Samuel,
"Or if it is not at the director or top-level management level,
at least the person has access to sister companies' bank
accounts."

He said such conditions were tantamount to unfair business
practices, especially in pricing, which hit competitors in the
industry.

Such practices violate Law No. 5/1999 on monopolistic
practices and unfair business competition. The law states that a
business or group of business institutions which dominate more
than 50 percent of a product's market share would be considered a
monopoly, which is not allowed.

The law also forbids the practice of holding concurrent
management positions in affiliated companies which operate in the
same market segment.

KPPU's director of communications Murman Budijanto told The
Jakarta Post that the commission would study the petition and
consider all the evidence gathered by Monopoly Watch. "We will
respond at least within the next 10 days," he said.

When contacted, a media relations officer of Indofood said the
company could not make any comment yet because the executives in
charge were not available for consultation.