Indonesia’s Business Competition Supervisory Commission (KPPU) will issue guidelines to retail companies next month that will require them to submit pre-notification of mergers and acquisitions.
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KPPU official Muhammad Iqbal told just-food that the guideline is designed to minimise unfair business practices and protect smaller retailers. Heavy penalties will apply to those who fail to file M&A reports, especially if they breed an unfair business environment, he added.
The new guideline follows KPPU’s investigation into alleged “unfair trade practices” by Carrefour after its acquisition of a 75% stake in PT Alfa Retailindo in January.
The KPPU declined to expand on what these alleged “unfair practices” are until they are able to conclude their investigation.
For its part, Carrefour has said that the KPPU is currently seeking “clarification” on a number of issues surrounding the deal.
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By GlobalData“They’ve been requesting data and information, which we have provided and will continue to provide should they request further information,” the company told just-food.
“In carrying out our business, we always follow all prevailing regulations. This principle obviously includes when we acquired 75% shares of PT Alfa Retailindo. Henceforth, we are confident that we acted within the applicable laws and regulations in Indonesia,” Carrefour added.
Defending the acquisition, the French retail giant pointed to market share information supporting its claim that it is not a dominant player in the Indonesian retail market.
“One of the issues that is frequently being discussed is possible market domination,” a spokesperson for the company said. “Referring to research conducted by Nielsen, Carrefour’s market share in [the] food market in Indonesia is 5% prior to acquiring Alfa. It increased to 7% after acquiring the company. Therefore, domination isn’t the case at all.”
