EU Frowns on ‘Supplier of Choice’

The European Union Competition Commission has given its stamp of approval to De Beers' plan to open retail stores with LVMH but expressed serious doubts about the legality of the company's new "Supplier of Choice" strategy. In line with those doubts, the EU has sent De Beers a "statement of objections" regarding the company's new direction. A source at the EU calls it "a reasonably strong statement," but neither De Beers nor the EU is spelling out what those objections are. A release from the European Commission—the EU's policy arm—did point to one aspect of the new system: De Beers' new agreements with its sightholders. "These agreements are designed to formalize what has so far been an informal commercial relationship between De Beers and its customers for the purchasing and selling of rough diamonds," the statement said. "A number of restrictions and trading conditions in the
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