6 business players involved in garlic price fixing

JAKARTA. The Business Competition Supervisory Commission (KPPU) suspects that price fixing committed by several business players has caused the price of garlic to skyrocket to Rp 80,000 (US$6.02) per kilogram, double the normal price of Rp 38,000 per kg, ahead of Idul Fitri.

“Six business players are suspected of involvement in the price fixing practices. This price is too high. Consumers will suffer losses. We are investigating the matter,” KPPU deputy chairman R.Kurnia Sya’ranie said on Friday.

“The business players intentionally reduced the realized imports of garlic with the hope this would lead to a price jump caused by the scarcity of the commodity in the market.”

Kurnia said the business groups allegedly involved in the price fixing case controlled 50 percent of garlic distribution permits. This meant consumers’ dependency on them was very high as they held most of the importation rights for the commodity. Once there is a decline in supplies, garlic prices increase.

“Garlic cannot be replaced by other commodities. That’s why it is prone to price fixing committed by business players with importation rights,” said Kurnia.

He highlighted that Trade Minister Enggartiasto Lukita had issued a circular, which set the garlic price at Rp 38,000. At that price, business players could have enjoyed profits and consumers’ purchasing power could be protected.

Kurnia said the KPPU’s main task was to monitor the implementation of Law No.5/1999 on monopolies and unfair business competition. KPPU strives to protect the public from unfair business practices and players, including those who have joined cartels, he added. (Suherdjoko)