The anti-monopoly watchdog has upped the stakes in its competition investigation of PT Carrefour Indonesia, and is now pursuing an examination of alleged monopolistic practices on the part of the retail giant.
The decision to upgrade the investigation level was taken after the Business Competition Supervisory Commission (KPPU) found “strong indications” of unfair business practices carried out by Carrefour during its 30-day preliminary investigation, said communication director Ahmad Djunadi Thursday.
The KPPU now has up to 90 working days to hand down a judgement to Carrefour, which is being accused of monopolistic practices in the country’s retail sector following its acquisition of supermarket operator PT Alfa Retailindo.
KPPU is accusing Carrefour of misusing its strengthened bargaining position to charge additional costs such as promotional fees, and listing fees to Carrefour’s suppliers.
Such practices are in violation of the 1999 anti-monopoly law.
The bargaining power of Carrefour, KPPU claimed, had improved significantly since the 2008 acquisition of Alfa both with suppliers (market share from 45 to 67 percent) and consumers (market share from 38 to 48.4 percent).
Carrefour responded by insisting the allegations were untrue.
“Carrefour’s stance is still the same. Our company does not monopolize the market and does not break any trade laws,” responded Irawan Kadarman, Carrefour’s corporate communications director.
Irawan said that his company has not received any letter from KPPU regarding the lengthy investigation.
“Therefore, I cannot give you detailed information of what our company is going to do,” Irawan said.
However, he added that Carrefour would cooperate and be willing to continue its communications with KPPU in order to find satisfactory solutions for both sides.
He reiterated the company’s position that based on AC Nielsen’s recent research, after the acquisition, Carrefour’s market share was only 17 percent.
It remains unclear what the consequences may be for Carrefour if KPPU finds the company to be in breach of competition rules.
Allegations against Carrefour on unfair business practices have not only been made in Indonesia.
In 2006, Carrefour was fined US$1.5 million by the Korean Fair Trade Commision (KFTC) because the retailer was found to have forced suppliers to sell goods at heavy discounts for certain periods, according to KPPU chairman Benny Pasaribu, after a meeting with KFTC’s top executives Thursday.
In a meeting with Yong-Ho Baek, chairman of the Korea’s anti-monopoly watchdog, Benny said KPPU and KFTC had discussed the Carrefour case here due to similarities with the case in Korea.
In 2006, KFTC also faced another major case on an acquisition involving Carrefour. In this case it was Eland Retail, a local Korean retailer, which acquired Carrefour in Korea.
However, Eland took the KFTC objection to court and eventually won its case.
Asked about the possibility of the same outcome happening in the Carrefour-Alfa case, with the KPPU possibly losing the case in court, Benny answered: “Of course the same outcome may happen again.
“That is why KPPU and KFTC have discussed the case. Both watchdogs try to learn from each other’s experiences.” (mrs)
