July 28, 2003
De Beers Hopes to Land in U.S. in 2004
De Beers told the Financial Times of London it met with the U.S. State Department and plans to meet with the U.S. Justice Department to clear the barriers to doing business in the U.S. by some time in 2004. The Justice Department has barred De Beers from selling diamonds directly into the U.S. on antitrust grounds. There's also an outstanding indictment against De Beers on a charge of industrial diamond price-fixing.
De Beers told FT it hopes the green light it received from the European Commission for its revamped Supplier of Choice marketing strategy and for its joint venture with LVMH to sell diamonds at retail would convince U.S. authorities it is no longer a monopoly. The company has long hoped its proactive involvement in the Kimberley Process, to prevent the sale of conflict diamonds, would also help its case in the U.S.
"We want a signal from the Department of Justice that there is nothing illegal about the way De Beers does business," says Gary Ralfe, De Beers managing director. "I find it unthinkable in the new De Beers that we cannnot market in the U.S." The company will likely also ask for the price-fixing charge to be dropped, since the case is closed and its codefendant has had charges dismissed.
De Beers will wait before approaching the Justice Department until the EC rules on whether an agreement to buy $800 million in diamonds from Russia's state-owned diamond producer, Alrosa, is anticompetitive. If that is a success and Justice Department meetings resolve the problems, Nicky Oppenheimer, De Beers chairman, and Ralfe could attend the opening of De Beers' first store on Fifth Avenue in New York City in 2004. Currently, the company's directors risk arrest if they set foot in the U.S.
by Peggy Jo Donahue