Indonesian regional governments draft retail regulations to protect MSMEs

Local governments in Bantul and Kediri are developing new regional regulations to manage the growth of modern retail outlets and shopping centers. These measures aim to balance investment opportunities with the protection of small businesses, cooperatives, and traditional markets.

In Bantul, the Regional House of Representatives (DPRD) has proposed five key amendments to the draft regulation. These include reducing the minimum distance for chain minimarkets from 1,500 meters to 1,000 meters, but restricting their operation to specific buffer districts: Kasihan, Banguntapan, and Sewon. Additionally, hypermarkets must maintain a 3,000-meter distance. To support local MSMEs, the regulation proposes a mandatory partnership where at least 30% of shelf space in supermarkets must be dedicated to local products.

Similarly, in Kediri, the DPRD and local government are preparing regulations to address the rapid proliferation of modern stores. The goal is to ensure that the expansion of modern retail does not harm the interests of MSMEs, grocery stores, and traditional markets. The Kediri legislative body is currently discussing several draft regional regulations, including those concerning the management of shopping centers and supermarkets.