Three Japfa units in Indonesia's probe into price-fixing

Three Indonesian subsidiaries of Singapore-listed Japfa have been caught up in investigations over alleged price fixing and cartel activity in the beef and poultry industries in the vast archipelagic nation.

Two of the Japfa units involved in the beef industry are due to appear before the country's Competition Commission, the KPPU, on Friday, Japfa said in a statement to the Singapore Exchange on Monday.

In the statement, Japfa provided an unofficial translation of its response to a query on the broader issue from the Indonesian stock exchange.

"Japfa Comfeed Indonesia, together with the other 16 poultry companies, was directed by the director-general of animal husbandry to cull six million poultry parent stocks in 2015," it said.

"The company does not, therefore, expect an allegation report on any violation of the law for complying with the direction of the director- general who is part of the Ministry of Agriculture."

The announcement said the company has been cooperating with the KPPU, which was still reviewing relevant information.

Japfa had not received any formal notification that the investigation would either be withdrawn or carried forward, it added.

In the announcement, the company added that for "completeness", it was disclosing that two other subsidiaries - Santosa Agrindo and Austasia Stockfeed - would be appearing before the KPPU on Friday, to answer cartel allegations and claims over the restriction of the distribution and sales of beef.

It added that each of the other 30 beef feedlot companies forming part of the industry body, the Asosiasi Produsen Daging & Feedlot Indonesia, has also been scheduled to appear before the KPPU in turn.

"Neither Santosa Agrindo nor Austasia Stockfeed has engaged in cartel activity and/or in restricting distribution and sales of product in relevant market and each will defend its position."

The company said its legal team had advised it that both companies have strong defences to the concerned allegations.

The company, therefore, does not expect either subsidiary to be penalised by KPPU.

In the event either or both subsidiaries are determined to have taken part in cartel and/or in restricting distribution and sales of product in relevant market activity, then based on the practice of the KPPU, an administrative fine capped at 250 million rupiah (S$25,700) per entity, is likely to be imposed.

In the meantime, the business and operations of Santosa Agrindo and Austasia Stockfeed are not affected by the proceedings.

The company said that it would continue to monitor the proceedings and make any further disclosures as necessary.

Japfa, headquartered in Singapore, has operations in Indonesia, China, Vietnam, India and Myanmar.

The company produces dairy, poultry, beef, pork and aquaculture products. It employs a total of 28,000 staff across the region.

A version of this article appeared in the print edition of The Straits Times on February 10, 2016, with the headline 'Three Japfa units in Indonesia's probe into price-fixing'. Print Edition | Subscribe