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)