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KPPU suspects unfair competition in garlic import

Tempo - August 13, 2019

Caesar Akbar, Jakarta – The Business Competition Supervisory Commission or KPPU suspects that there is potential for unhealthy competition behind the surge in garlic prices in February to May 2019. During those months, the commodity price soared to Rp70,000 per kilogram.

"There is the potential for unfair competition, where businesses limit the circulation or sale of goods or services to the relevant market," KPPU deputy for research and advocacy Taufik Ariyanto said on Monday, August 12.

One of the factors supporting the allegation is the change in garlic import policies by the Agriculture Ministry and the Trade Ministry. The policy is said to give market power to importers. As a result, importers with stocks from early 2019 were able prevent supplies from entering the market. The suspicion also rose from the absence of garlic imports from January to April 2019.

The policies concerned are the Horticultural Product Import Recommendations (RIPH) from the Agriculture Ministry and the Import Approval from Trade Ministry. To obtain an import permit, a company must comply with the 5-percent domestic planting mandate.

"The compulsory planting policy is suspected to be the cause of the late issuance of the RIPH, because the verification process took three months, from January to March. The RIPH was issued after the previous verifications were completed," said Taufik.

The Trade Ministry's import recommendation for early 2019 was also issued late, which was in April 2019.

"These conditions allowed importers with export recommendations from October 2018, and have maxed their imports quota, to gain control over supplies in the domestic market," Taufik said.

Taufik added that the SPI issuance pattern by the government was predicted by market players, giving them the opportunity to exploit the market by controlling supply of ample quantity.

KPPU spokesperson Guntur Saragih said the commission is investigating and studying the matter with regards to the Corruption Eradication Commission's (KPK) case on garlic import licensing. SO far, the case has implicated public officials including People's Legislative Assembly member from the Indonesian Democratic Party of Struggle (PDIP) I Nyoman Dhamantra.

Source: https://en.tempo.co/read/1235341/kppu-suspects-unfair-competition-in-garlic-import