VIVAnews - The Trade Minister Regulation No.53/2008 which was enacted since Jan. 1 2009 is suspected to have affected on goods' price reduction in modern retails. The Minister Regulation manages the guidance of traditional market, shopping center, and modern shop structuring and development.
"The product's price after the regulation [enactment] is only 40 percent higher from the distributor, while previously there were some who had to increase up to 70 percent," said the chairperson of the Indonesia Cosmetics Entrepreneur Association Putri K. Wardhani in Jakarta on Monday, April 5.
She explained that generally the price jump of 65-7- percent will only happen if the supplier provides the traditional market. While in modern retail the price is around 30-35 percent. "But in Jakarta, it's the opposite. The modern retails take the 70 percent price's increase portion," she said.
The result was many suppliers that created a cross subsidy on the profit from traditional market and modern retails. "But, for the Cosmetics Entrepreneur's members, there are only 300 companies of a total 1,000 companies that supply retails," she explained.
Wardhani agreed with the enactment of the Minister Regulation as an effort from the government. She said that the negotiation process on trade term is still going according to the target and has yet been finalized. However, the modern retails through Indonesia Retail Entrepreneur Association gave a positive signal for enacting the Minister Regulation although they haven't put it on paper.
The chairperson predicted that the price rise after the Minister Regulation can be observed on early April. "We'll see the number in the trading term bill because normally it's collected every two months," she said.
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Translated by: Ariyantri E. Tarman
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