Company Owned By Conglomerate Anthony Salim Allegedly Hoarding 1.1 Million Kilograms Of Cooking Oil, KPPU Calls The Discovery Strengthens Cartel Indication

JAKARTA - The Business Competition Supervisory Commission (KPPU) considers that the findings of the alleged hoarding of 1.1 million kilograms (kg) of cooking oil in Deli Serdang, North Sumatra further strengthen the indications of a cartel selling the commodity.

The head of KPPU, Ukay Karyadi, said that the finding of 1.1 million kilograms of cooking oil which was allegedly stockpiled in a large warehouse in North Sumatra was being investigated. This is because this is related to the alleged existence of a domestic cooking oil cartel.

"This finding further strengthens the indications of a cartel, because it can be interpreted that the company intends to influence prices by holding back supply to the market. The alleged cooking oil cartel is currently under investigation," he said when contacted by VOI, Monday, February 21.

Ukay said that KPPU had experienced the cartel allegation. In fact, he said that the investigation into cartel indications carried out by KPPU had reached the stage of summoning 11 cooking oil producers for questioning.

"So far, 11 cooking oil producers have been questioned, and this will continue with other cooking oil producers. Starting this week, KPPU has also scheduled 4 retailers and two retail associations (modern and traditional markets) for questioning," he said. .

But unfortunately, Ukay was reluctant to mention in more detail the 11 producers who had been called. This is because the investigation regarding the alleged cooking oil cartel is still ongoing. Even so, Ukay emphasized that he would immediately call the perpetrators suspected of hoarding the cooking oil.

"The hoarders will certainly be summoned, as well as the parties involved in the cooking oil production/distribution chain, from upstream to downstream," he said.

Previously, since mid-January, the KPPU had started to detect cartel signals regarding the problem of soaring cooking oil prices in the market. KPPU suspects that big businessmen who control the domestic cooking oil market share will manage the increase in these commodities together.

KPPU chairman Ukay Karyadi said that the market for cooking oil was relatively increased after the increase in crude palm oil (CPO) prices.

"This behavior can be interpreted as a signal whether this is a cartel because of property, but this must be legally proven," he said, in a virtual press conference, Thursday, January 20.

According to Ukay, the domestic cooking oil industry market tends to lead to an oligopoly structure. This is because the domestic market share is only controlled by four companies.

Based on data processed by KPPU, there are a number of cooking oil producers that have the highest market share. The largest had a share of 14 percent, 13.3 percent, 11 percent, and 8.2 percent. From these findings, 46.5 percent of the market share concentration ratio is controlled by four companies.

Ukay said that although there are currently many variants of cooking oil brands found on the market, the producers are relatively sourced from the same company. Therefore, he considered that cooking oil producers should be increased so that the bargaining power of consumers and producers is relatively the same.

"This is the government's domain, KPPU only participates in supervising it," he said.

In addition, Ukay continued, in the industrial structure, the big cooking oil players are suspected to be integrated with the palm oil plantation business group and some of its derivative products. This means that large cooking oil industries generally have their own oil palm plantations.

Furthermore, according to Ukay, the increase in CPO prices should not have too much influence on fluctuations in domestic cooking oil prices.

"There is no increase in production costs because the plantation is owned by itself. So even if the CPO for oil production is not increased, the cooking oil factory will still be profitable," he said.