High Court Hands Victory to Carrefour

The Supreme Court has rejected the Business Competition Supervisory Commission’s appeal of its ruling that voided sanctions against French-based retailer Carrefour for unfair market practices.

The commission, also known as the KPPU, accused Carrefour in November last year of violating business competition laws by monopolizing the wholesale supplier market and imposing unfair trading terms on its suppliers.

It ordered Carrefour to pay a fine of Rp 25 billion ($2.7 million) and to sell its 75 percent stake in retailer Alfa Retailindo.

The commission had said the retailing firm’s acquisition of a majority stake in Alfa pushed Carrefour’s market share to 58 percent last year from 46.3 percent in 2008.

The Supreme Court, however, junked the KPPU’s sanctions in February. Sunday’s ruling in favor of Carrefour — issued by judges Muhammad Taufik, Syamsul Ma’arif and Rehngena Purba — was welcomed by the company’s lawyer, Ignatius Andy.

“Hopefully, this can [set] a precedent that the KPPU can also make mistakes,” Ignatius was quoted in Tribunnews.com as saying. “This is a proper verdict and we feel relieved.”

The news portal also said KPPU deputy chairman Tresna P. Soemardi had declined to comment on the issue, saying only that the court verdict had to be studied by the commission.

The KPPU is an independent authority established to ensure that laws prohibiting monopolies and unfair business practices are properly implemented.

The commission also has the power to draft implementing regulations promoting free trade, conduct investigations into business misconduct and impose legal sanctions on violators.

Industry analysts said the Supreme Court’s most recent ruling would pave the way for Carrefour to implement its strategy to aggressively dominate one of the fastest expanding consumer markets in the region.

The retail giant will, however, face stiff competition from global retailers who are eyeing enteringthe Indonesian market by making a bid for another local retailer, Matahari Prima Putra.

The Carrefour case had caught investor and public attention in recent years, given the rally in consumer spending and the heated war between the country’s largest retailers.

Carrefour has been looking to expand its presence in the country and recently sold a significant stake to Indonesian tycoon Chairul Tandjung, who pledged to add more supermarket branches outside Java.

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