Garlic importers and government officials have denied accusations that they formed a garlic cartel that resulted in skyrocketing prices of the commodity.
Trade Ministry law bureau chief Lasminingsih, who spoke on behalf of Trade Minister Gita Wirjawan and director general for foreign trade Bachrul Chairi, denied the accusation in the second hearing on the case by the Business Competition Supervisory Commission (KPPU) in Jakarta on Monday.
She claimed that neither trade official were subject to the 1999 Monopoly and Unfair Competition Law, which was being used to hear the case.
“In this case, the KPPU does not have the authority to name the government — the trade minister and director general for foreign trade — as defendants because government officials are not subject to the law, only business players are,” she said.
Lasminingsih said in the issuance of horticulture import permits, the Trade Ministry was only one of the parties involved in the process. “This means that the Trade Ministry does not issue the permits unilaterally, but refers to a recommendation from another ministry,” she said, referring to the Agriculture Ministry.
The KPPU held the first hearing last month, with the team of investigators revealing that the alleged cartel was established by three groups of affiliated garlic importers to fix the prices and manage domestic supply.
The alleged cartel caused the price of the key raw food to jump nearly sevenfold to a record high of Rp 70,000 (US$6.65) per kilogram during the January–March period due to supply shortages.
Meanwhile, with beef prices still high, some ministries keep pointing fingers at each other over who should be blamed for beef shortages and increasing prices. The Agriculture Ministry and the Trade Ministry, along with the State-Owned Enterprises Ministry and the Office of the Coordinating Economic Minister, have for months intensely criticized each other over policies that led to beef shortages and wildly increasing prices, which hit Rp 130,000 per kilogram in Jakarta markets in recent weeks.
Among recent comments was one by the Agriculture Ministry, which said frozen beef imports — brought in at the recommendation of the Trade Ministry — was a bad option to meet domestic needs and that the Trade Ministry may have condoned anti-competitiveness practices carried out by importers and vendors.
Deputy Agriculture Minister Rusman Heriawan told reporters over the weekend that imported frozen meat was the worst choice compared to other import options, as it had no added value for domestic industries and only consumed foreign reserves.
“Live cattle is the best choice as it gives an opportunity to local slaughterhouses and feedlots to benefit from it,” Rusman said.
Rusman was referring to a recent import recommendation from the Trade Ministry for the State Logistics Agency (Bulog) to import an additional 3,000 tons of frozen beef outside of this year’s annual import quota, which comprises 32,000 tons of frozen beef and 267,000 head of cattle.
Bulog’s effort to stabilize prices by importing extra beef has been criticized as market vendors refused to sell the frozen meat, saying that consumers questioned its freshness, safety and halal status.
Source: Anggi M. Lubis and Linda Yulisman, The Jakarta Post, August 20 2013