Retailers deny breakdown in distribution networks

Retailers deny breakdown in distribution networks

JAKARTA (JP): The Indonesian Association of Retailers denied
yesterday the government's recent claim that skyrocketing prices
and shortages of basic commodities are being caused by a
breakdown in distribution networks following the May riots.

Association chairman Steve Sondakh told reporters after
meeting President B.J. Habibie that the distribution system had
been restored after a brief interruption caused by the widespread
unrest.

Shortages and soaring prices were primarily caused by rising
costs, which in turn forced factories to slash production or halt
operations altogether, Steve said.

"The disappearance of goods from the markets is likely to have
been caused by the soaring prices of their components or raw
materials," he said after the meeting at the Bina Graha
presidential office in which he was accompanied by other
association leaders, including Mira Amahorseya and Rudy
Sumampouw.

Steve, who is a senior executive of the Hero supermarket
chain, said most retailers had reported to him that they had
returned to normal operations, even in remote areas.

"Their stocks are low because production is low," he said.

Hero's supermarkets in Jakarta were also targeted by the
rioters. Most of the damaged Hero outlets have now reopened.

Steve's statement contradicted Habibie's earlier claim that
poor distribution networks caused shortages of basic commodities.

The chairman of the Indonesian Chamber of Commerce, Aburizal
Bakrie, and Minister of Cooperatives and Small Enterprises Adi
Sasono have also supported Habibie's claim.

They pointed out that the distribution network is largely
controlled by traders of Chinese descendants, many of whom fled
during and after the May riots and have yet to return.

The government has indicated that it would instruct
cooperatives to take over the role played by Chinese retailers in
distributing food.

"This won't have any impact at all. Based on our own
observations, there is no problem with the distribution of basic
commodities," Steve said. (prb)