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Ada Pertanyaan? Hubungi Kami Marcell Sihombing, Fitri N. Heriani
32 companies are allegedly involved in a possible meat cartel. Photo by: SGP
The Business Competition Supervisory Commission (Komisi Pengawasan Persaingan Usaha – “KPPU”) is continuing its investigations into the existence of a possible meat cartel. Investigations were first initiated after a sharp spike in the price of meat occurred after the Lebaran holiday. The KPPU finally opened trial proceedings into a possible beef cartel on 15 September 2015, at which a report into suspected violations was presented. It has also been decided that the alleged perpetrators will be able to present their side of the case next week.
A total of 32 alleged perpetrators are mentioned in the report, which was filed on 15 September 2015. A full list of these names is as follows: PT AKM, PT APS, PT AGP, PT AJK, PT AGK, PT AS, PT BMT, PT CABS, PT EI, PT FMP, PT GGL, PT LJP, PT LMaL, PT LMeL, PT PT, PT RAI, PT SaA, PT SNI, PT SeA, PT TUM, PT WMP, PT KGU, PT SGL, PT NTF, PT KAR, PT SCK, PT BPS, PT CMT, PT KLJ, CV MASang, CV MASam, and PT KAS. All of these perpetrators are suspected of being in violation of Article 11 and Article 19 of point “c” of Law No. 5 of 1999 (“Antitrust Law”)
Muhammad Rofiq, a KPPU investigator, explained that several indicators have strengthened the KPPU’s suspicions as regards this case. Rofiq asserts that the alleged perpetrators are suspected of violating Article 11 of the Antitrust Law by conspiring to manipulate the production and supply of goods and services in order to fix market prices to their advantage. The alleged perpetrators are all competing in the same line of business and, it is believed, discussed and fixed beef prices at association meetings.
“The companies concerned are alleged to have withheld supplies in order to boost prices, and this represents a marketing manipulation. The result of this manipulation was skyrocketing prices in both 2013 and in July of 2015,” explained Mr. Rofiq, citing the investigation report.
Mr. Rofiq stated that discussions pertaining to prices at association meetings were then followed by the consumer prices of their products becoming uniform. Moreover, stocks were withheld from the market under the pretext of maintaining supply. When taken as a whole, these facts tend to strengthen the suspicion that the association has been involved in price-fixing practices.
Furthermore, the alleged violation of Article 19 point “c” of the Antitrust Law essentially reflects on company behavior – both individually and collectively – as it sought to restrict market availability of their products. Investigators have discovered that during 2013, as well as between July and August of 2015, companies (acting either individually or collectively) manipulated market supply by limiting the sale of cows to slaughterhouses (Rumah Pemotongan Hewan – “RPH”) under the pretext of maintaining supplies. The result of this deliberate withholding of supply was a spike in the price of livestock, which in turn caused the price of beef to skyrocket.
Riza Haerudin, Director I of CV Mitra Agro Sampurna, as well as one of the alleged price-fixing perpetrators, has asserted that this year’s beef price is higher than it was last year, owing to fluctuations in the importation of livestock.
“Fundamentally, we are dealing with imported cows bought with US currency and not rupiah, and this means that supply is affected by the exchange rate. The point is, what was the exchange rate in 2012 and 2009? What about the recent slump in the exchange rate? We shouldn’t be comparing rupiah with rupiah in matters relating to imports,” asserted Mr. Haerudin after the trial proceedings.
Mr. Haerudin further elaborated that the rupiah/US dollar exchange rate had now reached a low of IDR 14,400, while the price of an Australian cow ranged between USD 2.7 and USD 2.9 per kilogram, depending on its sex.
Moreover, also of importance here, according to Mr. Haerudin, are the 5 percent customs surcharges and the 2.5 percent level of income tax as set out in Article 23, as well as transportation fees that range from IDR 500 to IDR 1000 per kilogram, depending on the ultimate destination of the product.
In total, additional fees generally range from IDR 43,000 up to IDR 44,000. Despite these fees, companies are obliged to sell beef at IDR 38,000 per kilogram, which means that companies can sustain losses of up to IDR 6,000 per kilogram.
Mr. Haerudin has thus ultimately shifted the blame to government policy. Import quotas are determined and announced every three month for livestock importers, and every four months for feedlots. However, according to Mr. Haerudin, the government could announce a yearly beef-import quota at the start of every year comprising of import quotas for each quarter.
The reality of the situation, though, is that quotas are announced at the start of each quarter. Moreover, a new quarter may already be well underway before the government gets round to announcing the latest import quota, and this creates huge problems for the companies concerned, complained Mr. Haerudin.
“Such mechanisms render us [importers and feedlot suppliers] unable to formulate a continuous and simultaneous strategy for a stable market,” concluded Mr. Haerudin.
(sp)
Marcell Sihombing, Fitri N. Heriani
32 companies are allegedly involved in a possible meat cartel. Photo by: SGP
The Business Competition Supervisory Commission (Komisi Pengawasan Persaingan Usaha – “KPPU”) is continuing its investigations into the existence of a possible meat cartel. Investigations were first initiated after a sharp spike in the price of meat occurred after the Lebaran holiday. The KPPU finally opened trial proceedings into a possible beef cartel on 15 September 2015, at which a report into suspected violations was presented. It has also been decided that the alleged perpetrators will be able to present their side of the case next week.
A total of 32 alleged perpetrators are mentioned in the report, which was filed on 15 September 2015. A full list of these names is as follows: PT AKM, PT APS, PT AGP, PT AJK, PT AGK, PT AS, PT BMT, PT CABS, PT EI, PT FMP, PT GGL, PT LJP, PT LMaL, PT LMeL, PT PT, PT RAI, PT SaA, PT SNI, PT SeA, PT TUM, PT WMP, PT KGU, PT SGL, PT NTF, PT KAR, PT SCK, PT BPS, PT CMT, PT KLJ, CV MASang, CV MASam, and PT KAS. All of these perpetrators are suspected of being in violation of Article 11 and Article 19 of point “c” of Law No. 5 of 1999 (“Antitrust Law”)
Muhammad Rofiq, a KPPU investigator, explained that several indicators have strengthened the KPPU’s suspicions as regards this case. Rofiq asserts that the alleged perpetrators are suspected of violating Article 11 of the Antitrust Law by conspiring to manipulate the production and supply of goods and services in order to fix market prices to their advantage. The alleged perpetrators are all competing in the same line of business and, it is believed, discussed and fixed beef prices at association meetings.
“The companies concerned are alleged to have withheld supplies in order to boost prices, and this represents a marketing manipulation. The result of this manipulation was skyrocketing prices in both 2013 and in July of 2015,” explained Mr. Rofiq, citing the investigation report.
Mr. Rofiq stated that discussions pertaining to prices at association meetings were then followed by the consumer prices of their products becoming uniform. Moreover, stocks were withheld from the market under the pretext of maintaining supply. When taken as a whole, these facts tend to strengthen the suspicion that the association has been involved in price-fixing practices.
Furthermore, the alleged violation of Article 19 point “c” of the Antitrust Law essentially reflects on company behavior – both individually and collectively – as it sought to restrict market availability of their products. Investigators have discovered that during 2013, as well as between July and August of 2015, companies (acting either individually or collectively) manipulated market supply by limiting the sale of cows to slaughterhouses (Rumah Pemotongan Hewan – “RPH”) under the pretext of maintaining supplies. The result of this deliberate withholding of supply was a spike in the price of livestock, which in turn caused the price of beef to skyrocket.
Riza Haerudin, Director I of CV Mitra Agro Sampurna, as well as one of the alleged price-fixing perpetrators, has asserted that this year’s beef price is higher than it was last year, owing to fluctuations in the importation of livestock.
“Fundamentally, we are dealing with imported cows bought with US currency and not rupiah, and this means that supply is affected by the exchange rate. The point is, what was the exchange rate in 2012 and 2009? What about the recent slump in the exchange rate? We shouldn’t be comparing rupiah with rupiah in matters relating to imports,” asserted Mr. Haerudin after the trial proceedings.
Mr. Haerudin further elaborated that the rupiah/US dollar exchange rate had now reached a low of IDR 14,400, while the price of an Australian cow ranged between USD 2.7 and USD 2.9 per kilogram, depending on its sex.
Moreover, also of importance here, according to Mr. Haerudin, are the 5 percent customs surcharges and the 2.5 percent level of income tax as set out in Article 23, as well as transportation fees that range from IDR 500 to IDR 1000 per kilogram, depending on the ultimate destination of the product.
In total, additional fees generally range from IDR 43,000 up to IDR 44,000. Despite these fees, companies are obliged to sell beef at IDR 38,000 per kilogram, which means that companies can sustain losses of up to IDR 6,000 per kilogram.
Mr. Haerudin has thus ultimately shifted the blame to government policy. Import quotas are determined and announced every three month for livestock importers, and every four months for feedlots. However, according to Mr. Haerudin, the government could announce a yearly beef-import quota at the start of every year comprising of import quotas for each quarter.
The reality of the situation, though, is that quotas are announced at the start of each quarter. Moreover, a new quarter may already be well underway before the government gets round to announcing the latest import quota, and this creates huge problems for the companies concerned, complained Mr. Haerudin.
“Such mechanisms render us [importers and feedlot suppliers] unable to formulate a continuous and simultaneous strategy for a stable market,” concluded Mr. Haerudin.
(sp)