AQUA found to be guilty of exclusive agreement and market control
Jakarta (19/12) – Indonesia’s leading packaged drinking water producer (AMDK) brand AQUA, PT Tirta Investama (TIV) and PT Balina Agung Perkasa (BAP) as the distributor, proved to conduct unfair competition through exclusive agreement and market control. For the violation, TIV was fined Rp 13.84 billion while BAP was fined Rp 6.29 billion. This was stated by the Supervisory Commission for Business Competition (KPPU) at the decision announcement held on Tuesday, December 19, 2017, at KPPU Jakarta Head Office.
“Stating the two reported (TIV and BAP) was proven legally and convincingly violating Article 15 paragraph (3) letter b and Article 19 letter a and b of Law Number 5 the Year 1999,” said Chairperson of Case Commission Council, Mrs. Kurnia Sya’ranie.
Article 15.3.b stipulates that business actors are prohibited from entering into agreements concerning prices or certain discounts on goods and or services, containing the requirement that business actors receiving goods and or services from a supplier’s business agent will not purchase the same or similar goods or services from other business actors who become competitors from supplier business actors.
While articles 19.a and 19.b stipulates that business actors are prohibited from performing one or several activities, either alone or together with other business actors, which may result in monopolistic practices and or unfair business competition in the form of (a) refusing and/or hindering business actors certain to conduct the same business activity in the relevant market; and (b) deter customers or competitors of their competitors from entering into business relationships with their competitors.
This case was started from the complaint of the retailer and retail merchants to the KPPU Head Office in September 2016. The retailer claimed to be blocked by PT Tirta Investama to sell Le Minerale products produced by PT Tirta Fresindo Jaya (Mayora Group). One of the clauses of the retail agreement says, if the merchant sells Le Minerale product, then the status will be derived from Star Outlet (SO) to the wholesaler (retail). For this action, PT Tirta Fresindo Jaya issued an open publication against PT Tirta Investama in the newspaper on October 1, 2017. This action was subsequently responded by KPPU and started its investigation.
The action by TIV seemed to deter other business actors in the market of AMDK. Moreover, the degradation causes, the retailer get a higher 3 percent price. For example, for Star Outlet, the price charged is Rp 37.000 per carton for the size of 600 milliliters, while for the Whole Seller is charged Rp 39.350 per carton.
In the process, KPPU finds strong evidence to support the violation. One of the evidence which the investigator team has was the evidence of e-mail communications. The investigator found a two-way communication between the TIV and BAP, which were sent to each other by e-mail address of the office. E-mail subject to “Star Outlet Degradation (SO) Being a Wholesaler.” contained sanctions applied by BAPto SO retailer. In fact, BAP was said to have executed the sanction to one of the Star Outlets.
Based on the information, AQUA products controlled the market share of up to 46.7 percent in the AMDK market, and followed by Club 4 percent (Indofood), 2 Tang (PT Tang Mas) 2.8 percent, Oasis (PT Santa Rosa Indonesia) 1.8 percent, Super O2 (Garuda Food) 1.7 percent, and Prima (Sosro) 1.4 percent.