The decision was read by KPPU Commissioner Chandra Setiawan on Friday (22/04). The companies, which includes the local unit of Australia-based agribusiness giant Elders, have been given 14 days to make an appeal. KPPU Commissioner Tresna Soemardi added that the institution found evidence - including statements from witnesses - that these 32 companies have been manipulating beef prices by curtailing the distribution of beef products on the domestic market as well as curbing imports of beef (hence causing inflationary pressures) by not making full use of their allowed import quota. This caused an "unnatural" price rise that benefits the earnings of the companies involved but comes at the expense of the Indonesian consumer.

Muhammad Syarkawi, Chairman of the KPPU, said these illegal actions of Indonesian beef importers are actually the result of weak government policy. The Indonesian government provides import quotas to a selection of companies that therefore are in a position to more-or-less determine the prices (because in terms of beef, Indonesia is still highly dependent on imports). In this situation it is very tempting for these companies to take advantage and curb the amount of imported beef in order to let prices soar. The beef price went as high as IDR 130,000 (approx. USD $9.85) per kilo in mid-2015, reason for the KPPU to start an investigation. Since 2010 - when the Indonesian government announced its "beef self-sufficiency program" - the government has been curtailing the beef import quota, hence undermining earnings of these beef importers in order to boost domestic beef production. This thus provided another incentive for these companies to engage in actions that would secure quick earnings.

Projection of Indonesia's Local Beef Production and Imports:

Year     Local
2019     716.1   59.5
2018     656.9   62.6
2017     602.4   65.9
2016     552.2   69.4
2015     509.7   73.0

in thousand tons
Source: Investor Daily

Indonesia's Chamber of Commerce and Industry (Kadin Indonesia) did not agree with the decision of the KPPU as it is considered to undermine legal certainty in the beef sector and results in the loss of jobs. One the companies that is fined, Agro Giri Perkasa, has already stopped operations, resulting in the sending home of about 100 employees.

Besides beef, there are also recurring stories of cartels in other sectors (such as rice and soybean) where alleged unethical actions of companies result in price swings at the expense of the consumer. The KPPU is currently investigating unusual fluctuations in the supply and price of rice.

32 Companies Fined by the KPPU:

Agrisatwa Jaya Kencana Catur Mitra Taruma Karya Anugerah Rumpin Rumpinary Agro Industry
Agro Giri Perkasa Citra Agro Buana Semesta Legok Makmur Lestari Sadajiwa Niaga Indonesia
Andini Agro Loka Elders Indonesia Lemang Mesuji Lestary Santosa Agrindo
Andini Karya Makmur Fortuna Megah Perkasa Lembu Jantan Perkasa Septia Anugerah
Andini Persada Sejahtera Great Giant Livestock Mitra Agro Sampurna Sukses Ganda Lestari
Austasia Stockfeed Kadila Lestari Jaya Mitra Agro Sangkuriang Sumber Cipta Kencana
Bina Mentari Tunggal Kariyana Gita Utama Nusantara Tropical Fruit Tanjung Unggul Mandiri
Brahman Perkasa Sentosa Karunia Alam Sentosa Abadi Pasir Tengah Widodo Makmur Perkasa

Source: Investor Daily


Lex McGuir |

What about the education cartel that charges 500,000,000 to 1,000,000,000 Rp to get into government medical schools to become a doctor (none of the money goes to the government all is corruption) or the money to get into school to become a policeman (the second most expensive school in Indonesia). Why can't KPK get them because all the government schools are involved?