Friday, April 17, 2009

Carrefour's Monopoly

French retail giant Carrefour opened its first supermarket in Jakarta on October 1998, since then it has expanded business very rapidly especially after PT. Carrefour Indonesia acquired 75% equity of PT. Alfa Retailindo, the owner of local Alfa Supermarket chain, on January 2008.

According to The Jakarta Post, local retailers have filed a report with the Business Competition Supervisory Commission (KPPU) saying that Carrefour has conducted monopoly. And the result of KPPU’s preliminary investigation shows that after the acquisition of Alfa, Carrefour’s downstream market share has soared to 48.4% from 38%, while its share on the upstream market has soared to 67%, up from 45%. The latter figure, indicates that Carrefour has violated the Anti-Monopoly Law No. 5 Year 1999, which stipulates that a market share of 50 percent or more may be considered as practice of monopoly.

Due to this fact, on Monday, 13 April, KPPU held a hearing with Carrefour, during which Carrefour denied KPPU’s allegation by saying that based on the result of recent research by AC Niesen, their present market share is only 7%.
KPPU has given Carrefour a chance to change its business practices until 13 May 2009, if they obey, KPPU will stop their investigation.

Considering the above, I hope that KPPU and Carrefour would reach a win-win solution for this problem which would be in accordance with the laws in our country, that way local retailers would not suffer much more.

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