Indonesia Weighs Restrictions on Minimarkets to Support Village Cooperatives
Jakarta – Indonesia’s Minister of Trade, Budi Santoso, has announced plans to discuss potential restrictions on the expansion of modern retail chains like Alfamart and Indomaret in rural areas. This comes amid a push to support the growth of Village/Kelurahan Cooperatives (Kopdes) Red and White, aimed at bolstering the village economy.
Government Debate Over Retail Expansion
The proposal to limit the expansion of large retail chains stems from concerns that they may overshadow and hinder the development of local village cooperatives. Minister of Villages, Disadvantaged Regions Development, and Transmigration, Yandri Susanto, has previously suggested halting the spread of minimarkets if Kopdes Red and White are already established, to protect the economic interests of village communities. Jakarta Globe
Minister Santoso stated he will meet with Minister Susanto to clarify the details and intent behind the proposed policy. “I plan to meet with Mr. Mendes. I don’t know what he means yet by limiting expansion. I and Mr. Mendes wanted to develop an appointment, and I as well wanted to ask what he meant,” Santoso said on February 24, 2026. Detik Finance
Existing Regulations and Zoning
According to Director General of Domestic Trade at the Ministry of Trade, Iqbal Shoffan Shofwan, regulations governing modern retail are already in place through existing government regulations and trade laws. Zoning regulations for retail establishments fall under the authority of regional governments (Pemda). Kompas
Shoffan emphasized that zoning rules vary across Indonesia, taking into account the unique characteristics of each region. “Zonasi to the regional government. So for zoning, for example 1 km in Serpong will be different from 1 km in Indramayu. So it depends on the regional government,” he explained. Bisnis.com
Different Market Segments
Shoffan further noted that modern retail chains primarily operate in urban areas, even as village cooperatives are generally located in rural areas, serving different demographic and economic segments. He suggested that the two types of retail can coexist, particularly with clear regulations and potential partnerships. Bisnis.com
The government will continue to monitor the evolving policy landscape and adapt regulations as needed, considering local conditions and the authority of regional governments.