Business Lobby Deplores $8.1m in Fines Against Beef Cartel
Jakarta. Organized business has deplored a decision by Indonesia's anti-monopoly agency on Friday (22/04) that 32 cattle-importer and feedlot companies were guilty of price fixing and curbing the supply of beef in order to manipulate the market in the Greater-Jakarta area.
The Business Competition Supervisory Commission (KPPU) imposed fines worth Rp 107 billion ($8.1 million) in total on the companies, which include the local unit of Australian agribusiness giant Elders.
Permata Adoe, the deputy chairman for food processing and farm business at the Indonesia Chamber of Commerce and Industry (Kadin), deplored the agency's decision, saying that it would undermine legal certainty in the beef industry.
"We are still in a process of working with the government to increase investment and jobs in the industry. But now the KPPU takes an opposing position," he said.
All 32 companies were found to be in contravention of the Law on Monopolies for having colluded to fix prices and to manipulate the supply of beef, KPPU commissioner Chandra Setiawan told a hearing on Friday.
As a result of the charges, one of the companies, Agro Giri Perkasa, has halted operations at the beginning of the year and laid off 100 of its employees.
Nurmalita Malik, a lawyer representing Tanjung Unggul Mandiri — which has to pay the biggest fine: Rp 21 billion — said her client never colluded with other companies to fix beef prices. Nurmalita said the company's business model would not permit it to withhold products from the market as the KPPU alleged.
"The cattle-fattening period cannot continue for more than four months, or the company would have to bear losses. Beyond that period, cattle add more fat than meat," she said.
KPPU chairman Muhammad Syarkawi said cartel practices in the beef industry were rooted in the government's policy to impose quotas rather than tariffs on beef imports.
"The companies use their position to withhold, or to reschedule the sales of beef, resulting in an artificial shortage in the market and rising prices, which are hurting consumers," Syarkawi said.
The KPPU decided to prosecute the companies last September, after beef prices rose to as high as Rp 130,000 per kilogram in the weeks preceding Idul Fitri in July 2015.
The 32 companies that were found guilty are:
1. Agrisatwa Jaya Kencana
2. Agro Giri Perkasa
3. Andini Agro Loka
4. Andini Karya Makmur
5. Andini Persada Sejahtera
6. Austasia Stockfeed
7. Bina Mentari Tunggal
8. Brahman Perkasa Sentosa
9. Catur Mitra Taruma
10. Citra Agro Buana Semesta
11. Elders Indonesia
12. Fortuna Megah Perkasa
13. Great Giant Livestock
14. Kadila Lestari Jaya
15. Kariyana Gita Utama
16. Karunia Alam Sentosa Abadi
17. Karya Anugerah Rumpin
18. Legok Makmur Lestari
19. Lemang Mesuji Lestary
20. Lembu Jantan Perkasa
21. Mitra Agro Sampurna
22. Mitra Agro Sangkuriang
23. Nusantara Tropical Fruit
24. Pasir Tengah
25. Rumpinary Agro Industry
26. Sadajiwa Niaga Indonesia
27. Santosa Agrindo
28. Septia Anugerah
29. Sukses Ganda Lestari
30. Sumber Cipta Kencana
31. Tanjung Unggul Mandiri
32. Widodo Makmur Perkasa
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