November 11, 2002
EC Approves Supplier of Choice
The European Commission approved Supplier of Choice, De Beers' plan to overhaul its distribution system of more than $4 billion of rough diamonds a year to help drive demand for the precious stones on Nov. 11.
Supplier of Choice is part of a De Beers plan to rejuvenate diamond demand by streamlining distribution and creating the designer branding that already exists in other luxury goods.
Tentative approval by one of the world's two big antitrust authorities is a triumph for De Beers, which had been branded as a cartel for decades. Final EC approval next month is likely to be little more than a formality, because it is satisfied De Beers will give customers enough flexibility to meet requirements of antitrust law, according to Reuters.
"This is not a cartel," said De Beers spokesperson Amelia Torres. She said that even when a company is in a dominant position it is entitled to choose what it considers the most efficient distribution channels.
Although the approval is all but a done deal, the public is free to raise any objections over the next month.
"This is an indication that the commission has almost completed its inquiry into Supplier of Choice and that it is likely to take a positive view," said De Beers spokesperson Tom Tweedy in South Africa.