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Indonesia: Retailers ask for quick fix in new fruit import regulation

Local retailers have asked the government to immediately revise a new Trade Minister regulation on horticulture imports, which they said would significantly hurt their fruit trade businesses.

Under the new rule on horticulture imports, retailers can only source products from local distributors and are prohibited from directly importing horticulture products.

Indonesian Retailers Association (Aprindo) deputy secretary-general Satria Hamid said on Friday that local retailers called for a change in the horticulture import regulation so that they can directly import the products needed by their customers and ensure the efficiency of their business.

“The new rule makes the distribution chains longer because we must source [horticulture products] through distributors and this will surely push up costs,” he said during a press briefing in Jakarta.

The new regulation stipulates that the local retailers should purchase fruits and vegetables from at least three distributors, which also source their products from general importers.

This arrangement was issued as several local retailers had reportedly taken advantage of direct importation by buying products that are not marketable in other countries, thus allowing them to sell fruits and vegetables at very low prices, Trade Ministry director general for foreign trade Deddy Saleh said.

At present, local retailers supply 70 percent of their horticulture needs from local suppliers, who also import many products, and the remaining 30 percent from direct importation, which is usually made to obtain specific products necessary for product differentiation.

The new requirement also imposed an additional burden in terms of costs because of the restriction on import gateways, particularly by excluding Tanjung Priok Port — the entry for more than half of the country’s present horticulture imports, Satria added.

The restriction of import gateways from eight to four has been set by the agriculture minister to improve supervision on imported horticulture products, guaranteeing their safety for local customers.

The overloaded capacity at Tanjung Priok Port has resulted in poor supervision on imports in recent years.

Aprindo executive director Tutum Rahanta pointed out the small quantity of certain imported products as another difficulty of implementing the new regulation on horticulture imports.

“The market share of the horticulture products imported directly by retailers is usually small, and therefore, local distributors are not willing to import them,” he said, adding that it would mean local retailers could not obtain specific products for market diversification purpose.

The retailers have also asked the ministry to revise another import regulation that allows general importers only to import products classified under the same category. The ministry has agreed to revise the regulation, but the retailers complained that the revision was too slow.

“The government has agreed to exclude retailers and multilevel marketers from the general importers category and therefore, they will receive different treatment from general importers. It should revise the regulation soon, before the supply of goods runs out,” Tutum said.

Source: www.thejakartapost.com

Publication date: 5/21/2012


 


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