ICC REGIONAL OFFICE II MONITORS PRICES IN 5 PROVINCES TO PREVENT ANTICOMPETITIVE CONDUCT IN BEEF TRADE.

The Indonesia Competition Commission (ICC), especially Regional Office II domiciled in Bandar Lampung City, found indications of an agreement among Bandar Lampung meat traders to make an adjustment to meat prices at consumer level in Bandar Lampung City as of the incoming January 21. The agreement was found in the form of circular letter issued by the Bandar Lampung Meat Traders Association (PPD) Number 01/PPS/01/2021, which plans to jointly make an adjustment to the selling price of beef at consumer level in Bandar Lampung City to IDR125,0000/kg as from January 21, 2021. Such finding was obtained by the Regional Office II during its beef price monitoring activities conducted in such 5 provinces as the Regional Office II’s work regions.

In order to follow up on such finding, the Regional Office II held a coordination meeting today with the Lampung Province Livestock and Animal Health Service Office, the Lampung Province Industry and Trade Service Office, the Bandar Lampung Meat Traders Association (PPD), and several Feedlot companies in the region of Lampung Province. The Head of ICC Regional Office II, Wahyu Bekti Anggoro, gave various inputs in the meeting to anticipate the development of beef problems in Lampung Province.

For your information, ICC Regional Office II has been intensively monitoring beef prices in 5 provinces as its work regions (namely South Sumatra, Lampung, Bengkulu, Jambi, and Bangka Belitung) in the last few days in order to anticipate anticompetitive practices by meat traders in line with the issuance of circular letter of the Indonesian Meat Traders Association (APDI) Number 08/A/DPD-APDI/1/2021 which contains an appeal to stop meat trading activities in the greater Jakarta areas as from January 19 – 22, 2021. One of the purposes of such monitoring activities is to collect data on prices and beef stocks so as to see the potential problems befalling beef commodities.

Based on the monitoring of ICC Regional Office II, the price of beef in South Sumatra Province was IDR130,000/kg, while the price of beef in Lampung Province, Bengkulu Province, Jambi Province, and Bangka Belitung Province was IDR120,000/kg and the price of beef in 5 provinces as its work regions had been monitored as stable since January 2020. Furthermore, it was found that the purchase price of live cattle in one of the Abattoirs in Lampung Province, had increased since October 2020 with an accumulated total increase until January 2021 of IDR2,000,000/kg, while at the same time the Slaughterhouse in Lampung Province had maintained their position of not raising prices since October 2020, hence giving rise to many Abattoirs to have to close down due to the losses suffered.

In the meantime, it was found that the purchase price of (imported) feeder cattle had increased since July 2020 at Feedlot company level. The increase in the purchase price of feeder cattle was triggered by the decreased availability of stock at the supplier level in the exporting country (Australia), due to the flood disaster befalling East Australia in 2018 and brought about the death of 600,000 head of cattle. In addition to that, the appreciation of the exchange rate of Australian dollar against the US dollar co-boosted the price of feeder cattle at importer level.

ICC Regional Office II will continue monitoring prices at every level of the beef distribution chain to prevent anti-competitive behavior in the 5 Provinces of the ICC Regional Office II’s work regions, especially in Lampung Province in the near future.