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KPPU Taking Battle Over Carrefour Monopoly Ruling to Supreme Court
Irvan Tisnabudi | February 24, 2010

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The nation’s antimonopoly watchdog will soon file an appeal to the Supreme Court seeking to have its decision ordering French supermarket giant Carrefour to sell its 75 percent stake in a local retailer reinstated.

Ahmad Junaidi, communications director for the Business Competition Supervisory Commission (KPPU), told the Jakarta Globe on Wednesday that an appeal would be filed by March 1.

“The KPPU has a different view than the South Jakarta District Court,” he said.

“Carrefour still has a dominant position in the market.”

On Feb. 17, the court annulled a ruling by the KPPU forcing Carrefour to sell its 75 percent stake in retailer PT Alfa Retailindo and fining it Rp 25 billion ($2.7 million).

The regulator claimed Carrefour had violated business competition laws by dominating the wholesale supplier market and forcing unfair trading terms on its vendors.

However, the court accepted PT Carrefour Indonesia’s evidence that it did not have a monopoly over the supermarket sector.

The KPPU plans to bring new evidence to the Supreme Court showing that Carrefour controls more than 50 percent of the domestic sector based on the amount of goods it buys from its suppliers, Ahmad said.

Based on this evidence, he claimed Carrefour controlled 58 percent of the market.

“This is one factor that South Jakarta District Court did not take into account,” Ahmad said.

The South Jakarta District Court accepted Carrefour Indonesia’s evidence — a survey by AC Nielsen Media Research that found that the company only had a 17 percent share of the market following its acquisition of PT Alfa Retailindo.

The court’s chief justice said the KPPU’s calculation of Carrefour’s reach was inaccurate because it did not include smaller supermarkets and convenience stores that sell the same goods as larger retailers.

Irawan Kadarman, director of corporate affairs for Carrefour Indonesia, said it was the right of the KPPU to file an appeal.

“But we are sure that the Supreme Court will rule in favor of the stronger evidence,” Irawan said.

“The South Jakarta District Court’s decision should be a factor in the Supreme Court’s deliberations,” he said.

The supermarket chain bought 75 percent of Alfa Retailindo in 2008 for Rp 675 billion from Indonesian retailer PT Sigmantara Alfindo and Singapore’s Prime Horizon.

Currently, Carrefour has 75 supermarkets nationwide, including 30 acquired as part of the purchase of the Alfa Retailindo stake.

The 30 former Alfa Retailindo outlets are located in Java, Sumatra, Bali and Sulawesi.