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Jakarta Post

We've found no violation: KPPU on skyrocketing face mask prices

  • Eisya A. Eloksari

    The Jakarta Post

Jakarta   /   Thu, March 5, 2020   /   03:08 pm
We've found no violation: KPPU on skyrocketing face mask prices Business Competition Supervisory Commission (KPPU) commissioner Guntur Saragih (right) and KPPU economic director Zulfirmansyah (left) brief reporters on the sharp increase in face masks prices in Jakarta on March 3. (JP/Eisya Eloksari)

The Business Competition Supervisory Commission (KPPU) has found no violations in relation to the scarcity of face masks, which has caused their prices to skyrocket amid growing fears over the new coronavirus in the country.

KPPU commissioner Guntur Saragih said during a press conference on Tuesday that the sharp increase in prices of face masks was purely caused by the supply shortage due to high demand rather than due to hoarding or other unfair business practices.

"Based on our monitoring, we’ve found no violations of Law No.5/1999 or other offenses," he said in a reference to the law on monopoly and business competition.

Read also: Kimia Farma puts in place mask and hand sanitizer rationing to ensure availability

In addition to Jakarta, the monitoring was also conducted in KPPU regional offices in Bandung, West Java; Balikpapan East Kalimantan; Lampung in South Sumatra, Makassar, South Sulawesi; Medan in North Sumatra and Surabaya, East Java.

He said Law No.5/1999 only applied to corporations, excluding small and medium retailers, including individuals selling masks via e-commerce.

N95 masks were being sold for Rp 1.3 million (US$94.61) for a box containing 20 masks. In early January, such a box was sold only for around Rp 200,000. Meanwhile, according to sellers at Pramuka drugstores in East Jakarta, the sale of protective face masks had more than tripled.

“Price increases are not unusual and we have yet to find any violation of the law,” Guntur said, while adding that corporations found in violation of the regulation could be fined a maximum  Rp 25 billion.

He said that the sharp increase in prices of face masks had occurred because producers were unable to meet the high demand.

“We asked the public to not panic and not stock up on masks because doing so could worsen the situation,” he told reporters.

Peope buy masks and antiseptic gel at a Kimia Farma outlet in Menteng, Central Jakarta, on Wendesday, March 4, 2020.

Peope buy masks and antiseptic gel at a Kimia Farma outlet in Menteng, Central Jakarta, on Wendesday, March 4, 2020. (JP/Riza Roidila Mufti)

Market monitoring was conducted beginning in February and concluded before Indonesia announced its first coronavirus cases on Monday. Hence, Guntur said that the KPPU was still open to receiving reports from anyone who found foul play in the market.

Meanwhile, KPPU economic director Zulfirmansyah said that the price surge was normal since prices usually went up in times of scarcity.

“Big retailers such as minimarkets are still selling masks at a normal price, which is around Rp 9,500 apiece,” he said. “And even though they sell quickly, they always restock every two days.”

The Health Ministry previously said a shortage of face masks in Indonesia had been triggered by hoaxes that caused people to panic, causing uncontrolled buying and hoarding. 

Read also: Surabaya Mayor Risma admits to hoarding masks 'since January' in anticipation of COVID-19 outbreak

Panic buying also hit supermarkets and drugstores across Jakarta on Monday as people stocked up on cooking oil, instant noodles and antiseptic. Jakartans also descended on drugstores to buy hand sanitizer, multivitamins and wet wipes.

Meanwhile, the Jakarta Police raided a mask manufacturer on Feb. 27. During the raid, the police seized 60 boxes containing 3,000 masks in a warehouse in Cilincing, North Jakarta

The police later found that the warehouse was not only being used to stockpile masks but also functioned as a mask production facility. Investigators discovered that the company, could produce 850 boxes of masks every day.