Retail sector deal thrown into doubt

JAKARTA (JP): City Council has questioned whether a cooperation program between small entrepreneurs and Goro wholesale company would continue after its management was taken over by the Confederation of Primary Cooperative Associations (Inkud) early this month.

Head of Commission B for economic affairs, Djafar Badjeber, said the future of the cooperation program, which they had mulled over in March, was uncertain after the Goro management takeover.

"The Goro management has not informed us about the future of the cooperation after the management takeover. We hope that Inkud will continue the project because it is a good concept aimed at helping people lift their living standards," he said.

The so-called "warung (small shop) Goro" concept was proposed by the management of Goro to the city administration and accepted by Governor Sutiyoso in February.

The scheme is also intended to strengthen small shop owners so that the retail sector would no longer be dominated by supermarkets and modern stores.

Under the concept, Goro will offer each store a capital of Rp 50 million (US$4,166) in the form of goods. Goro will also train the shop owner in retail business management.

According to Djafar, about 500 people have shown interest in taking part in the cooperation program.

However, he said, the Goro management has never informed the council on the number of people who have actually opened warung Goro shops.

Goro, established in 1995, was 55 percent controlled by PT Goro Batara Sakti and 45 percent owned by PT Goro Yudhistira Utama before the takeover. Goro Batara was 80 percent owned by PT Humpuss, headed by former president Soeharto's youngest son Hutomo Mandala Putra, and 20 percent controlled by businessman Ricardo Gelael. Goro Yudhistira was 75 percent owned by Goro Batara and 25 percent by Inkud.

But later, Inkud said it had taken over Humpuss' 80 percent stake and Gelael's 20 percent stake in Goro Batara, making it the full owner of the wholesaler.

Djafar said the council planned to summon representatives of Inkud to discuss the matter.

"We will ask whether Goro's new management is still able to supply merchandise to warung Goro shops because they lost two markets in the recent riots," he said.

He added that he was not sure if the meeting could take place in the near future due to the situation.

Djafar said the administration should take action if the new management failed to continue the project.

"An alternative could be that the city speed up the establishment of its own food distribution company, PT Waserda Jaya, to take over the project," he added.

The plan to establish Waserda Jaya was proposed by Deputy Governor for Economic Affairs Harun Al Rasyid in March.

The new company is expected to enable cooperatives to compete with other retailers. (ind)