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18 April 2023
News Indonesia

Jakarta (30/3) – Indonesia Competition Commission (ICC) brought together more than a hundred cooking oil producers and distributors for education purposes so as not to conduct tying sales behavior or confine the circulations/sales of the cooking oil. The education was done in line with the findings of the ICC in all the regional offices indicating the existence of alleged tying sales of Minyakita cooking oil, as well as the limitation of the circulation in certain regions. The education activity was conducted virtually by Mulyawan Renamenggala, Director of Economy and M. Zulfirmansyah, Director of Competition and Partnership Advocacy of the ICC from the Head Office of the ICC in Jakarta today.

The research at the ICC as we know it shows that cooking oil business actors, both viewed from the producer and distributor sides, have conducted rampant tying sales practice or the limitation of the circulation in the sales of the cooking oil and other products, without knowing that such practice is in violation of business competition provisions. The ICC has followed up such several findings to the law enforcement proceedings. For the purpose of comprehensively ending such behavior, the ICC has brought together more than a hundred business actors engaged in the cooking oil sector, precisely 67 (sixty-even) cooking oil producers and 38 (thirty-eight) cooking oil distributors, to reprimand such business actors for their anti-competitive behaviors that can be found in the cooking oil sales, particularly the risk of violating Article 15 paragraph 2 in respect of the tying sales and Article 19 sub-article c in respect of the limitation of the circulation or sales of goods/services.

Mulyawan said in his explanation that there had been a finding of the scarcity of Minyakita cooking oil products and the price that was above the highest retail price in December-February 2023, as well as a decrease in the cooking oil production, both for bulk and simple packaging products. He further explained that the government had added the supply of the packaged and bulk cooking oil products up to 450,000 tons for 3 (three) months as from February to April 2023 so to keep the stocks of people's cooking oil. At the moment, the realized production of the people's Minyakita packaged cooking oil is just around 24% of the total people's cooking oil program. This has given rise to the more limited availability of the Minyakita cooking oil as compared to the bulk cooking oil. Such scarcity will have the potential to spur the price of the Minyakita cooking oil at consumer level, hence spurring unfair business competition practices such as tying sales between Minyakita products and other products or withholding the supply with a hope of the occurrence of a higher price.

Zulfirmansyah has specifically called business actors not to conduct tying sales or the limitation of the circulation/sales (such as withholding the supply) for such actions can violate the provisions of the law. Such anti-competitive actions can pose negative impacts in the market, among other things, in the shape of a limited supply, an unreasonable price increass and an increase in the market concentration, which eventually can reduce competition. In addition to the above, the practices of tying sales can also be used as a means to disguise the pricing practice and or the predatory pricing practice.

The ICC hopes that through the education both the producers and distributors can later know that the practices of tying sales and withholding supply constitute behaviors that have the potential to violate Law No. 5 of 1999, hence, not to be conducted in the market. The business actors are also expected that they can supervise the distribution of the Minyakita products so as to be better, so that the communities can access the products at an affordable price and do not become the victims of the anti-competitive behavior.