Friday, March 24, 2006

KPPU shouldn't punish Semen Gresik; the market would

So the nation's antitrust committee, KPPU has reached another verdict, this time against PT Semen Gresik. According to KPPU, Semen Gresik has violated the Commpetition Law (UU No. 5 Th 1999). Among all, SG allegedly 1) sets retail price , 2) decides who are allowed to do business with its distributors, and 3) forbids its distributors to sell cement produced by its competitors.

Semen Gresik denies. It says, this is common practice in business.

I agree with Semen Gresik. I don't think KPPU is the right entity to punish (or to decide the punishment for) SG for such conducts. The distributors have the options to leave Semen Gresik anytime and serve Semen Tonasa, Semen Cibinong, whatever. If Semen Gresik is doing something bad, it will lose its distributors and consumers. The market will punish it.

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