Indonesia Retail Law May Limit Expansion of Carrefour

Bloomberg, Dec. 28. By Yoga Rusmana and Wahyudi Soeriaatmadja

Indonesia's government passed a law designed to restrict store locations for retail chain operators including Carrefour SA and PT Matahari Putra Prima.

``The outlet locations of modern and traditional retailers should be administered more properly,'' Trade Minister Mari Pangestu told reporters in Jakarta today. Local governments in Indonesia's 33 provinces ``will have the authority to implement this zoning rule,'' she said, without providing other details on the new law.

Indonesia is following Thailand and state governments in India in trying to appease owners of small shops, which are losing market share to retail chains. The new law could force companies such as Carrefour, Europe's biggest retailer, to build new outlets outside cities.

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