The Business Competition Supervisory Commission (KPPU) says it will soon launch a probe to determine the reasons behind a prolonged spike in beef and cattle prices in the nation.

The KPPU’s chairman, Nawir Messi, said that the commission had found indications of unfair competition in the food commodities business that he said might have resulted from cartel-like or oligopolistic business practices.

“We will submit our initial recommendations to the government to review the nature of the market, stock prices, the characteristics of local production and other factors, so that it will not come to any misleading conclusions,” Nawir said after a public hearing on beef supply-chain management in Jakarta on Wednesday.

The hearing was convened by the commission following a report that was issued last week by the National Economic Committee (KEN) that alleged that prices had been fixed for several key food commodities, including beef.

The committee’s comments received additional attention following the emergence of the nation’s latest high-profile bribery scandal, which this time has touched on government contracts for imported meat.

The scandal led to the resignation of Prosperous Justice Party (PKS) chairman Luthfi Hasan Ishaaq from his party post and from the House of Representatives (DPR) after the Corruption Eradication Commission (KPK) named him a suspect in the case.

Two executives from one of the nation’s largest meat importing companies, Indoguna Utama, have been arrested in the case for allegedly bribing Luthfi to help them secure a slot to import beef under a government procurement project.

Beef imports are under the authority of Agriculture Minister Suswono, who is also a senior PKS politician.

Contacted separately, Widhanardi, a researcher for one of Indonesia’s largest slaughterhouses, Darma Jaya in Cakung, East Jakarta, said that a shortage of live cattle from feedlots since August had led Darma Jaya to reduce operations.

“The facility normally can slaughter 200 live cattle per day, but due to shrinking supply, at present, it only slaughters 50 cattle on a daily basis,” he said after the public hearing.

Widhanardi said that prices had soared after the government curbed import licenses, leading to intense competition between slaughterhouses.

Despite insufficient local production, the government has cut cattle imports for 2013 to around 80,000 tons of beef, down about 13 percent from 92,000 tons last year.

A representative of the Indonesian Retailers Association (Aprindo) expressed similar concerns at the hearing, saying that Aprindo’s members had reported difficulties in finding beef starting from the start of the Idul Fitri holiday, the nation’s peak consumption season, last year, while prices soared.

“The normal pattern is for beef prices to decline after the holiday is over, but in fact, the prices have remained very high,” Aprindo deputy secretary-general Satria Hamid said. “This is an irregularity that we’ve not seen before.”

Local retailers needed around 12,700 tons of beef to supply supermarkets and hypermarkets in 2012

This year, demand is expected to jump by 30 percent to 17,160 tons along with expansion of the retail chains.

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