PT Nestle defends its Tangerang distributor

JAKARTA (JP): PT Nestle Indonesia, one of the country's largest milk producers, denied yesterday that its Tangerang-based distributor PT Pangan Elok Mandiri housed stockpiles of its products.

The company's vice president, Rudianto, said the products which were allegedly hoarded by the distributor consisted of reserve products to be used in anticipation of any demand fluctuations.

"It was done with the consent of PT Nestle. It's not stockpiling," he said.

On Friday, Tangerang Police and military district personnel broke into four warehouses in Tangerang which were believed to be hoarding basic commodities, including milk, cooking oil, instant noodles and wheat flour.

Three of the warehouses, including PT Pangan Elok Mandiri's, were sealed. PT Sekawan Pangan Jaya, PT Kumpul and PT Sumber Cisadane owned the remaining premises.

The sealed warehouses were reopened Sunday as Tangerang Police could not prove they had been used for product stockpiling.

The government announced recently that hoarding goods deemed to be one of the nine basic commodities was against the law. These items are rice, sugar, salt, detergent, kerosene, synthetic fabric, unbleached cloth, cooking oil and salted fish.

The warehouses owned by PT Pangan Elok Mandiri and PT Kumpul are located on Jl. Imam Bonjol, one of the town's main thoroughfares, while the other two are in Pasar Anyer traditional market and on Jl. Hasyim Ashari in Cipondoh.

Police also questioned five people for allegedly hoarding the products for their own interests.

Rudianto said PT Nestle continuously monitored the distribution chain of its products.

"If distributors fail to follow procedures, such as stockpiling and raising prices arbitrarily, we will revoke their agreement with us," he said.

Since the economic crisis began in July, PT Nestle has revoked an agreement with one of its distributors for stockpiling, he said, without providing further details.

Rudianto explained that the prices of PT Nestle's products have increased about 140 percent in seven months.

He said the rise was unavoidable due to the skyrocketing prices of raw materials after the sharp fall of rupiah against the U.S. dollar.

Sixty percent to 70 percent of the materials used for milk products are imported, he said. (jun)