European Commission Closes Book on Supplier of Choice

By Rob Bates -- JCK Online, 4/1/2007 2:00:00 AM

The European Commission has ended its investigation of De Beers' Supplier of Choice policy, based on what it calls the “increased transparency in De Beers' distribution arrangements.”

The EC says it recently had De Beers “revise the mandate” of the Supplier of Choice ombudsman to further increase transparency. Now the ombudsman “will filter all the information De Beers collects for the purpose of admitting sightholders and allocating rough diamonds,” the commission says.

“This should enhance the existing measures in place to ensure that De Beers' distribution decisions will not be based on any extraneous information, whether submitted on request or voluntarily,” says an EC statement. “In view of its actions in relation to the issues of De Beers' purchases from Alrosa and to SoC, the commission has therefore reached the conclusion that the main competition concerns of the complaints have been addressed.”

The commission said it will continue to watch the effectiveness of the implementation of Supplier of Choice.

In a statement, Varda Shine, managing director of De Beers' Diamond Trading Company, said, “We are pleased with today's announcement of the commission's decision. It demonstrates, once again, that Supplier of Choice has withstood scrutiny from one of the world's most rigorous competition authorities, and the recent complaints about Supplier of Choice are without merit.”