Vertical Integration of Broiler Industries in Indonesia (Analysis of Case Decisions Number 02/KPPU-I/2016)

Abstract

This study aims to get a deeper explanation of vertical integration in the broiler industry in Indonesia. The data used is secondary data on case decisions number 02 / KPPU-I / 2016. KomisiPengawasPersaingan Usaha (KPPU) Republik Indonesia has issued a decision about the alleged violation of article 11 of Act Number 5 of 1999 related to the regulation of broiler production in Indonesia. The data obtained were analyzed by descriptive method. The results obtained are (1) there are 20 large companies that are directly related to the broiler trade industry, (2) broiler industry products are DOC, feed, vitamins and drugs, raw materials for poultry feed and carcasses, (3) the business category in the broiler trade industry is integrated business, semi-integration business and non-integrated businesses. Integration business consists of vertical integration and horizontal integration. Vertical integration is a business that has a series of production processes from upstream to downstream. Semi-integration business is a business that only has more than one production line but does not control the business from upstream to downstream. Non-integration business is a business that only has one production process. Integration business has a dominant market share and can influence the price maker. It was suggested that the Government monitor more closely the large companies that carry out integration so as not to collude and form a monopoly market.