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Food distributors under fire for inflated prices
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W
hen shallots that are bought for Rp 16,000 (US$1.2) per kilogram (kg) from Nganjuk farmers in East Java are sold to end consumers in the capital city for Rp 40,000 per kg, something must be wrong.
The margin is too high and the prices are unfair for buyers, said Business Competition Supervisory Commission (KPPU) head Syarkawi Rauf, pointing to food distributors that are suspected of conducting cartel business practices.
“There is a big chance that distributors are cooperating and establishing a cartel to set a big margin on top of the farmers’ prices,” Syarkawi told reporters in Jakarta on Tuesday.
President Joko “Jokowi” Widodo’s administration is struggling to keep food prices in check, having rolled out incentives for farmers and imported several key commodities such as beef, shallots and sugar to ensure adequate supply and, hence, maintain stable prices.
However, the measures have thus far failed to stabilize prices, which have soared beyond the government’s targets. Shallots, for instance, are supposed to be priced at
Rp 25,000 per kg, but they are currently trading at almost Rp 40,000 per kg in Jakarta’s markets.
Similarly, beef is sold at an average of Rp 127,000 per kg, above the government’s target of Rp 80,000 per kg. Meanwhile, chicken is now sold for up to Rp 40,000 per kg at local markets, compared with the price of Rp 15,000 per kg bought from farmers.
To investigate suspicions of foul play done by food distributors, the KPPU has agreed to cooperate with the National Police and the Corruption Eradication Commission (KPK) for a joint investigation to crack down on possible cartels taking advantage of the Ramadhan month by deliberately setting sky high prices of staple foods.
If found guilty of practicing unhealthy business competition, large distributors can be fined up to
Rp 100 billion, while small distributors will be given reeducation.
An operation conducted by Jakarta-owned market operator PD Pasar Jaya simultaneously across the 20 markets in the city was a breath of fresh air amid such high prices.
In the operation, staple foods are sold at cheaper prices. For example, beef is sold for Rp 89,000 per kg, shallots for Rp 23,000 per kg and chicken meat for Rp 29,000 per kg.
By noon, Pasar Jaya’s stock at the Jatinegara Market in East Jakarta was sold out. One customer, Siti Maemunah, said the she was among the dozens of shoppers who scrambled to buy the goods.
Similar to in Jakarta, food in South Sumatra has also experienced a steep price hike. For example, current beef prices in the province reached Rp 140,000 per kg from the previous Rp 100,000 per kg.
“We will call a number of businesspeople to find a solution to the rising prices of beef and chicken meat in the market,“ South Sumatra’s Livestock Agency head Amruzi Minha said as reported by Antara News.
In East Nusa Tenggara (NTT) prices seem tame. Beef is sold for up to Rp 85,000 per kg by one of the nation’s biggest beef suppliers that distributes to Greater Jakarta.
NTT livestock agency head Dany Sumadi said businessmen in the area had enough stock, thus prices were still stable. Dany said Kupang’s Oeba slaughterhouse would butcher up to 80 head of cattle a day to provide beef for Kupang and its neighboring cities.
