Chairman of the Indonesian Retailers Association (Aprindo): DISTRIBUTION SYSETM OF RETAILERS EFFICIENT ENOUGH TO ANTICIPATE INCREASING PRICES OF DAI

The Indonesian Retailers Association (Aprindo) questioned certainty of distribution of basic necessities strategy discussed by the Ministry of Trade, Ministry of Agriculture and some associations related to trading of basic necessities followed by price monitoring at the market. “The Distribution Sector is not to be under estimated in terms of importance, because the marketing of any product at all must be backed up by efficient and effective distribution system. Moreover, in the present situation there is a tendency of price increase of nine basic commodities due to various factors, especially weather” Tutum Rahanta, Chairman of Aprindo disclosed to BusinessNews on Monday (19/7).

One of the basic commodities whose price and supplies were distributed at the moment was chilli. The price of chilli at the market was still high due to weather factor. The price increase of basic electricity tariff and arrival of the Ramadhan fasting month were mentioned as triggers of price increase of basic commodities at the market. “Aprindo, as supplier of stock for the modern market is always in a standby position to anticipate need of three months ahead. Especially in terms of fresh and fast necessities like rice, chilli etc we are always ready to serve. Usually retailers need two weeks to control outlets, particularly the modern markets in Jakarta and other main cities. As a whole, there are no problems with retailers and modern markets because in terms of distribution of basic necessities since the flow of goods is running well”.

Some fast selling and freshly served products were, distribution wise, strongly influenced by weather factor. Retailers of two types of products the past selling and the freshly served are interrelated In times of shortage of the fresh food, consumers might turn to canned food “Retailers of the modern market are preparing themselves in such a way that basic materials, in any condition at all must not be out of stock. The task of Aprindo is to manage distribution to modern markets, especially in the present situation”.

The effort to stabilize prices at the modern market could carried out by retailers of the modern market, as long as it was not too sternly done. Price fluctuations at the Central Market, or the speculators’ disturbances did not worry Apriando. But the panic stricken consumers due to electricity price increase, or anomalous weather were most fearfully disheartening to Aprindo.

“We can always peg prices of basic necessities at distributor level, especially at the modern market. But in case of electricity price increase the situation is force majeur because public’s panic is the risk. Foul weather, though it may affect yields cab\n still be overcome. Prices of basic materials will surely be higher at the modern markets than that at the Central Market. Spare of price at the modern markets (compared to the Central market) enables us to peg whereby not too burden consumers too heavily” Tutum Rahanta remarked.

In nearly all of the outlets of the modern markets, basic necessities like rice, chilli, meat, flour etc. constitute 20% to 30% of the entire stock. Meanwhile industrial goods lake canned food and other family needs constitute 70% to 80%. The ratio is considerably ideal, considering that the modern market aim their products more at the upper segment. Price turbulence at the market is not unusual each time during days of religious festivities like Idul Fitri, Christmas, New Year and Chinese New Year. Fluctuative range of basic necessities at the traditional market is around 5 to 20 percent, while the range of price at the modern market is narrower, i.e. 5 to 10 percent. Such a range is natural, not too fearful except in situations of force majeur The market’s panic especially in modern markets also tend to be less because of the price spare already formed by the price at the Central Market.