Indonesia's new law banning monopolies will affect Indofood

by Teresa Acklin
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   JAKARTA, INDONESIA — Indonesia's Parliament has adopted a law that in effect will require the breakup of the Indofood domination over both domestic cup noodle manufacturing and flour milling.

   The new law gives Indonesian companies 18 months to come into compliance with a provision setting a 50% market share as the maximum any single group could have. In addition, the law bans vertical integration where an independent Commission for Supervision of Competition holds that a relationship would interfere with competition.

   Through its P.T. Bogasari subsidiary, Indofood has had a near monopoly on flour milling in Indonesia, and the parent has a nearly 90% share of the cup noodle business.