Beef Maximum Retail Price Policy (HET) Fails to Maintain Price Affordability for Consumers

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International and Domestic Beef Price Disparities

Over the past year, beef prices in the global market have shown a continuous upward trend, with the highest year-on-year increase recorded in November 2024–2025 at 24.32%. Meanwhile, domestic prices have remained relatively stable at the upper end of IDR 130,000–140,000, with no significant fluctuations throughout the year. Given that Indonesia's beef supply is largely dependent on imports, this contradiction raises an important question: why do lower international market prices fail to be absorbed domestically?

Portrait of the Beef Market in Q4 2025

International beef prices have continued to rise due to several contributing factors. In the fourth quarter in particular, livestock population recovery efforts alongside climate challenges in the United States and Brazil reduced global beef supply. This redirected demand toward Australian beef production, thus driving prices upward. On the other hand, domestic prices appear to be largely unaffected by international market dynamics, despite the country's considerable reliance on imported beef. This can be attributed to two factors: retail prices that do not follow market mechanisms, and the high transaction costs associated with the import process.

The existence of a reference price policy for beef sales under National Food Agency Regulation No. 12/2024 sets the consumer-level price of beef at IDR 130,000–140,000. This policy renders beef prices rigid and unresponsive to market mechanisms. The price was established by the government, taking into account various cost components, including the high costs of distribution and transactions. Both factors ultimately disadvantage consumers, who are unable to benefit from lower beef prices when global prices decline while still facing increasing prices during periods of high demand.

Maintaining Price Stability in Anticipation of Peak Demand

As the month of Ramadan and Eid al-Fitr approach, beef prices are expected to rise, in line with trends observed in previous years. This situation may be further aggravated by the beef import quota policy, which could constrain the flexibility to meet domestic demand.

CIPS recommends three policy steps to address this issue. First, the government's beef import quota policy, implemented through the commodity balance, should be broadened to ensure a smooth flow of supply into the domestic market, in line with market dynamics and demand fluctuations. Second, the government should reassess the maximum retail price (HET) policy for beef, as it has demonstrably failed to protect consumers and ensure affordable prices. On the contrary, the beef maximum retail price forces consumers to pay higher prices regardless of international price trends. Third, improvements in logistics infrastructure performance, including transportation and warehousing, are essential to reduce import transaction costs and prevent further price increases.

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