Court Dismisses Indonesia’s Antitrust Commission (KPPU) Decision on Poultry Cartel

In early 2016, the Indonesian antitrust commission investigated how the 12 largest feedmills allegedly colluded to form a “cartel” to control the poultry business.  Specifically named in the investigation was Charoen Pokphand Jaya Farm, Japfa Comfeed Indonesia, Malindo (Bibit Indonesia), CJ-PIA (Cheil Jedang Superfeed), and Wonokoyo Jaya Corp which accounts for about 85% of all the parent stock.  Total parent stock is about 35 million chicken.  Charoen Pokphand is the largest with roughly 50% of the parent stock.

These 12 companies were accused of working together to cull parent stock in an effort to reduce supply thus causing an increase in price.  Company spokesman responded to the allegations stating that the culling was in response to an oversupply in the market.

The antitrust commission ruled in their order no. 02/KPPU-I/2016 were guilty of anti-competitive actions and slapped a USD 8.9 million fine against the 12 companies involved.

On 29 November 2017, a Jakarta court finally dismissed the charges and the accompanying fine.  Stating in their decision that the antitrust commission in their ruling, did not take into account a letter from the Secretary of Agriculture that earlier instructed these companies to cull their parent stock.  So these actions were taken not as a result of collusion, but were openly done in response to the instructions from the Secretary of Agriculture.