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De Beers - Value-Added Services” - April.2005
In April, 2005, the DTC announced it would offer value added services to its sightholders to support its clients as they develop their businesses to compete in the 21st century diamond and other luxury goods businesses
• CORE SERVICES - 2% fee attached to this payable by all clients.
The Core Services include items that are integral to Supplier of Choice, like the “Intention to Offer” system and the supplier extranet.
Inferences drawn from the release were that clients would not be subsidizing market support for generic advertising and consumer confidence programs (as has been reported in some of the trade media).
• GROWTH SERVICES - Optiona - Sightholders may participate (should they choose).
Described as “tools for growth and business development,” these services include seminars, market insight workshops, generic advertising materials, and business excellence seminars.
The Financial Times referred to De Beers as becoming a "de facto marketing consultancy". In response, Gareth Penny, DTC Managing Director, said, “The idea is to use our expertise to ensure our clients can maximize the value of the products they sell.”
• TRADEMARKS
The DTC is also allowing the sightholders to use their sightholder status as an intra-trade marketing tool, by allowing use of DTC trademarks (ie Forevermark and sightholder logo.
VALUE ADDED SERVICES July 2005 - PRESS RELEASE
The Diamond Trading Company (DTC), the sales and marketing arm of The De Beers Group of Companies, has begun the roll-out process of Value Added Services (VAS) to its Sightholders.
Value Added Services consists of Core Services and Growth Services.
Core Services are a set of supply planning tools, provided to all Sightholders, aimed at maximizing the value of each client’s core business.
• These services are integral to the operation of SoC and are the only elements of the VAS package for which a fee is payable.
• They include continuity of supply for 2.5 years, the ITO, consistency of boxes, the client extranet service and the KAM service.
Also connected under the “Core Services” heading, though non-chargeable, are a number of business sustainability measures such as generic demand generation and consumer confidence programs.
Growth Services are a set of tools for growth and business development that are available to interested Sightholders on request.
•These include local market knowledge and opportunity seminars, generic advertising and marketing material and business excellence seminars.
Following the completion of the Supplier of Choice application process, Sightholders have received a detailed guide to the Value Added Services on offer from the beginning of the new contract period that starts on 7 July 2005.
“We are looking forward to working with our Sightholders to identify their individual needs. Value Added Services will enable us to work in partnership with our Sightholders to help secure the future growth and profitability of their businesses in an ever-changing and more competitive market,” says Varda Shine, Director of Sales.
KEY ACCOUNT MANAGERS
During July and August, Sightholders will be discussing their service requirements with Key Account Managers who will then develop a bespoke service plan for each Sightholder
More About The DTC
Formed in 1934, the Diamond Trading Company (DTC) was incorporated in 1986 and established as a stand-alone company within the De Beers Group in July 2004.
Launched in 2000, Supplier of Choice is the DTC's business strategy to drive consumer demand for diamond jewelry in an environment where diamonds are facing greater competition than ever before from the other luxury categories, such as international travel and luxury goods brands.
To date, Supplier of Choice has had a significant and positive impact on the diamond market. In 2004, diamond sales increased by 8%, following a 7% increase in 2003.
Supplier of Choice
On July 12th, 2000, at the Sadler Wells Theater in London,
De Beers announced its new policy with respect to
its sightholders and its distribution system.
The new "Supplier of Choice" strategy includes the creation of a powerful new identity, the introduction of a policy statement, and a code of professional and ethical standards ("Best Practice Principles") to insure continued consumer confidence through the industry's commitment to the highest professional and ethical standards.
Nicky Oppenheimer, the Chairman of De Beers Consolidated Mines, Ltd., is quoted as having said that the new "strategy places De Beers and its partners in a stronger position to meet the business and consumer challenges of the future". www.debeersgroup.com
Since then, the Supplier of Choice has been postponed possibly for 3 months, possibly until the end of the year, possibly indefinitely. During the July 2001 sight week, an official announcement was made to the sightholders concerning this.
Before the announcement, it was noted on the www.diamondregistry.com, June 2001, that "the problem may be that De Beers has tried to do too much, too fast. They have undergone a complete makeover in one year. Dramatic moves
attract attention, and as you can see, it's not always the kind of
attention you want."
On July 19, 2001, however, on www.professionaljeweler.com, Andy Lamont was quoted as saying "Supplier of Choice is non-negotiable. The way the world conducts business demands that we improve efficiencies in supply and change the way the industry as a whole markets diamonds. Some traditionalists may want to see us revert to the old way of doing things,
but we absolutely will not. De Beers is committed to transforming itself."
Earlier than that, on www.diamonds.net, there is an interesting take about the situation. "The De Beers takeover story and resultant uncertainty is just an example of how change is challenging us. The implementation of De Beers new supplier of choice program this July is also scaring the wits out of the sightholders. In the current environment firms are not sure what is expected of them and what it will take to maintain their preferred position with De Beers." The article goes on to say, "Competition among sightholders for the most saleable rough is fierce and many are concerned that any delay in implementing marketing programs will threaten their ability to obtain priority allocations of rough from De Beers." Then it concludes with the sentence, "For many sightholders, uncertainty about market conditions is but a minor inconvenience compared to the uncertainty they face about how to deal with De Beers and how to implement new strategic marketing initiatives." The entire article is here.
www.diamonds.net is definitely one of the best websites for analysis of the Supplier of Choice program and other matters related to De Beers. An interview with Gareth Penny, "Supplier of Choice" by Martin Rapaport, is must reading. The interview took place before the European Commission's approval of the LVMH merger and the objections regarding the Supplier of Choice program. Penny discussed several questions, including:
- What will happen when the Supplier of Choice (SOC) program is implemented?
- How will the DTC decide on the list of SOC sightholders?
- What is a sightholder extranet?
| Rapaport's interview with Penny, again linked here offers invaluable insight into the "Supplier of Choice" program.
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www.ft.com has an article about Gareth Penny entitled "Gareth Penny takes diamond group's sales tiller". In July 2001, Gareth Penny succeeded Nigel Wisden in the position of sales director and is now in charge of both DTC sales and marketing. Mr. Penny, the grandson of Julian Ogilvie Thompson, is a graduate of Oxford and a Rhodes Scholar. He held a number of positions at De Beers and Anglo American before his appointment in January 2001 as the Manager in charge of the Strategic Review of De Beers.
The article describes Mr. Penny as the architect of the Supplier of Choice, "the policy that should transform De Beers from market custodian and buyer of last resort to marketing led supplier." It goes on to say that it is significant because it shows De Beers' determination to "forge ahead with Supplier of Choice despite criticism from its dealer customers and the European antitrust probe."
Another article on www.ft.com, "A fighter for the diamond business", is a profile about Gary Ralfe who is De Beers first managing director. It is stated in the article that as soon as he and Nicky Oppenheimer, executive chairman, "replaced an older generation of managers in early 1998, they realised the business was struggling." It goes on to say that the Strategic Review was launched in 1999 and that after realizing that there was more involved in the company's difficulties than management style, the board brought in the consultancy firm of Bain and Company.
Ralfe in the Ring appeared on www.diamondconsult.com on November 10, 2000. When an older generation of De Beers' managers was replaced three years ago, the company began a
remarkable transformation through the cultivation of Gary Ralfe's 'BHAGs' (Big Hairy Audacious Goals). In a recent article
in the Financial Times (FT), Victor Mallet, inquired if Ralfe 'relishes a fight', to which Ralfe responded, "those things give me a great buzz. I enjoy negotiations enormously, be they in Russia or with the Namibian government. Does it mean I've got a pugilistic instinct? I like a good scrap so it must be a certain belligerence of character."
In 1998 the 'Ralfe realm' began. Ralfe stresses the year was not just the worst possible year after the Asian crash, but alludes to the fact that De Beers was having a succession of difficulties, one problem being old fashion management. "I inherited a chain of command that was fairly paternalistic and autocratic and had an enormous number of decisions flowing back to me to resolve," he comments. Now directors are measured with 'key performance indicators' and have more of their pay based on corporate and individual performance." Ralfe's 'BHAG' at the moment is to
double the value of De Beer's diamond business to $10 billion.
It was not long after his appointment as Managing Director that Ralfe realized that there was more to De Beers' difficulties than management style and sought the help of management consultants' Bain & Co. "I actually said I think we must bring on Bain because they will give us a more uncomfortable ride." But notes Ralfe, a ride that has been fun as well. "There's been a phenomenal momentum that has gathered pace. With this review (Strategic Review) I have to admit that there were times when I've said, My goodness, I've let a genie out of the bottle and I can't put it back."
The biggest change in the way De Beers will try to maintain its dominance over the rough diamond trade is the move away from the 'Supplier of Last Resort' to the 'Supplier of Choice,' focusing on raising the level of consumer demand. 'Together with Nicky Oppenheimer, Ralfe is trying to have De Beers re-valued by skeptical investors while leading the company through the minefield of competition law in Europe and U.S.'
My favorite site for information on everything that has to do with the diamond business is diamondintelligence.com where you will need a password for access to the Diamond Intelligence Briefs. The following will give you an idea of what is on the site with specific reference to the Supplier of Choice.
Supplier of Choice Notification to European Commission:
Gambling With One's Future June 6, 2001 by Chaim Even-Zohar
TNS - May 17, 2001 The notification by De Beers to the
European Commission has triggered the single largest investigation ever conducted by Europe's Competition Authorities into the diamond industry's single channel marketing system. The question is: is there any chance that the EC will approve the Supplier of Choice rough distribution method? Most legal experts consulted by Diamond Intelligence Briefs seem to believe that the chance for getting a green light is minimal, close to zero. Getting a negative finding is far more damaging than having no finding at all. Perusing the 65-questions posed to sightholders, it makes one wonder whether it wouldn't be better for the Diamond Trading Company (DTC ) to play it safe and withdraw the notification. This would probably end the investigation, provided the withdrawal is made forthwith. On the other hand:
the notification was made by the DTC after a number of preliminary discussions between De Beers and the Commission. One should almost assume that Gary Ralfe and Gareth Penny know something we don't; that they had good reasons for taking the risk. They may have been encouraged to make the notification, being led to believe that it would have a chance to pass. However, they also may have misread the signals or have been misled. This is all conjecture. But the law doesn't seem to be
on the side of the DTC - and that can't be comforting.
What legal issues are involved? The basic EC competition rules applying to private undertakings are Articles 85 and 86 of the EC Treaty (the Treaty of Rome). Article 85 prohibits collusion between undertakings which may affect trade between member states and have the objective or affect of restricting competition within the common market. Article 86 prohibits the
abusive exploitation of a dominant position. Whatever happens in Europe will also have ramifications elsewhere. The cooperation agreement between the U.S. and the EC specifically focuses on these two articles. The U.S. undertakes to conduct joint investigations, i.e. it will investigate in its country and support European investigations, and vice versa.
In the United States, the mere appearance of a cartel, or trust, may trigger investigations by the authorities. In Europe, the authorities generally respond to complaints by injured parties. Although the Commission has the authority to initiate the investigations, it generally will not do so without having a specific complaint. (Though we are aware of numerous communications between diamond companies and the EC in the past, none of these contacts have ever led to a full-scale EC investigation, which is something requiring substantial EC resources and is not undertaken lightly.)
European Competition law is more flexible than the US laws. Beside the general principle of community law of nurturing free competition in open markets, the constitution of the EC provides for a system ensuring that competition on the internal market is not distorted. A former EC Competition Commissioner stresses that "it is often forgotten that competition policy is not an end in itself, but rather one of the instruments towards the fundamental goals laid out in the EC Treaty - namely the establishment of a common market, the approximation of economic policy, the promotion of harmonious development and economic expansion, the increase of living standards and the bringing about of closer relationships between member states. Competition policy therefore cannot be understood or applied without reference to this legal, economic, political and social context."
Therefore, the European Commission maintains wide authority to exempt certain agreements, providing for a certain amount of flexibility. Regulation 17, which basically provides the procedures for implementation of the aforementioned articles 85 and 86, allows the EC to provide exemptions. The fact that the DTC has consciously engaged in extensive consultations with the European Commission in an effort to bring both its selling mechanism as well as its relationship with other producers into compliance with EC competition law, should certainly work in its favor. It is undoubtedly far better to have an investigation based on a DTC request rather than based on a hostile complaint. The question is whether that will make much difference in the outcome.
It can't be stressed sufficiently that under EC law, abuse of dominant position, rather than the dominant position per se is prohibited. Furthermore, competition policy is behavioral rather than structural and the so-called "effects doctrine" is followed. So, there is wide ranging discretion on the part of the Commission to allow behavior compatible with long term benefits favoring internal market. At the end of the day, competition law protects consumers rather than particular competitors. Question 56 in the EC questionnaire reads: "Do you think the Supplier of Choice will have an effecton the price of diamonds to the end consumer?" An affirmative answer could become problematic to De Beers.
We assume that sightholders, eager to protect their interests with the DTC and also very much cognizant of the fact that De Beers will have a chance to read the non-confidential part of the individual submissions to the EC, will complete the questionnaires in the most favorable manner from a De Beers perspective. Even though De Beers operations are currently not in compliance with European competition laws, there has always been a consensus among the diamond merchants in general, and those of Antwerp in particular, that the DTC acts to the benefit of the entire industry. In other words, except for disgruntled parties (and there are such entities), most diamond companies are neither motivated, have an incentive to initiate complaints against the DTC, or are likely to intentionally jeopardize the system that has served the industry well.
Is the DTC gambling on that support? Is it worth the "additional risks?" When an investigation starts one doesn't know to where it can lead. It must be mentioned, for example, that producers that have entered into agreements with the DTC may also be found in violation of EC law. Article 85(1) of the EC Treaty prohibits, as incompatible with the common market, collusion between firms that may affect trade between member states and has the object or effect of restricting competition within the common market. It gives examples of practices that may infringe, including directly or indirectly fixing purchase or selling prices or other trading conditions. The DTC seems to act in collusion with other producer members of the cartel to set market prices. The formal signing of the trade agreements with the Russian and other producers, which effectively makes such producers, members of the cartel, contain detailed provisions allowing each cartel member (e.g. the Russians) to participate in the decision making process on the setting of prices and on the volume of rough diamonds to be supplied to the market. As such, arrangements are publicly acknowledged and confirmed in press releases, in statements by executives of the DTC and the producers involved, in the official annual reports of the producers and on other occasions. There is ample evidence of apparent illegal collusion.
Even if the sightholders are supportive of the DTC in the way they respond to the questionnaire, the EC has, from a legal perspective, no problem in showing that the DTC has entered into agreements to fix prices, to establish production quotas, to supply the market generally with slightly fewer stones than needed in order to maintain price stability, to create buffer stocks, etc. There is doubt that the recent policy of not acting as custodian of the market, the determination not to maintain buffer stocks in the future, will be enough to "clear" the DTC. Supplier of Choice is still a single channel marketing scheme, albeit by a different name.
On the eve of the contract renewal negotiations with the Russians, this is certainly not the place to make legal arguments (which is clearly not in our journalistic competence), but we do want to underscore the vulnerability of not only the DTC but also its contracted producers. As De Beers seems to be making strenuous efforts to bring its operations into compliance with EC law, it may well have to make some very vital decisions on the form and content of its marketing arrangements with the Russians.
De Beers must have anticipated that its new policies would make it vulnerable to new types of legal challenges: it's not just the Supplier of Choice and the LVMH deal, there is also the De Beers Brand and exclusionary nature of the "Forevermark". Question 58 of the questionnaire is a leading one: "Please explain whether you think that the Forevermark will create a de facto hallmark for the entire diamond industry and whether similar systems will be operated by competitors to De Beers?"
De Beers is leading the diamond industry well into legally unchartered territory. EC competition law is not immune to political pressures. This may help the DTC. Just imagine what the ramifications for Belgium would be if the DTC could not legally use Antwerp as point of first distribution for some 60 percent of its rough (including Indian dealers taking their allocations in Belgium). How unpredictable this is, may be best illustrated by the experience of De Beers with the Belgium competition authorities in the Ashton bid, which clearly seems to defy any logical reason: there is, unquestionably, not one trading country that benefits more from the DTC single channel marketing system than Belgium. For that country to become an obstacle to De Beers (and especially in something as remote as the takeover of a part of a mine in Australia) seems to us as illogical as it would be to deny Walt Disney from visiting Disney World.
Within a few days De Beers will be privatized. The management will be formally assumed by Central Holdings Limited, the Oppenheimer family company. Chairman Nicky Oppenheimer may use the new situation to review the reviews made by previous management. He is entitled to postpone, change, modify - he can do whatever he feels is best. In spite of statements made in the bid documents, when it is his own company Nicky Oppenheimer is not bound by any specific course of actions. To the contrary: adjusting direction may well enable Nicky to quickly assert leadership. Indeed, the privatization may well provide an elegant opportunity to take those actions, which will return tranquility to the diamond industry and relieve sightholders from these upsetting questionnaires. Chaim Even-Zohar
The EC Sightholder Questionnaire
Following is a random selection out of the 65 questions posed by the
European Competition Authorities to the sightholders. The questionnaire
also includes 7 questions (on individual rough and polished purchases,
sales, in carats and Euro, covering the 1998-2001 period), which were
taken from the DTC Sightholder Profile Questionnaire.
Here are the questions:
- Please specify
the names and contact details of your five largest suppliers of rough
diamonds.
- If applicable, give the names and contact details of your five
largest customers of rough diamonds.
- If applicable, give the names
and contact details of your five largest customers of polished diamonds.
- When assessing competition in relation to polished diamonds, do you
consider that all polished diamonds should be considered together, or are
there sub-categories which should be considered as distinct from one
another? Such sub-categories could be based on, for example, price
differences, quality of the product, and/or the potential end-users of the
diamonds. In your reply, please specify what you consider these
sub-categories to be, and why.
- Do you consider the market(s) for
polished diamonds to be worldwide, European-wide, national or local?
Please explain your answer, including reference to whether there exists
different tastes in different regions, or whether there are price
differences, whether the geographical scope of competition is different
for the different sub-categories of polished diamonds you have identified,
where your customers are based, etc.
- Do you consider De Beers' Polished
Division to be a competitor in the sales of polished diamonds?
- Give the
names of your main competitors and estimate their market shares.
- If you
purchase rough diamonds from non-DTC sources, please describe your reasons
for purchasing diamonds from sources other than the DTC. In your response,
please indicate whether you have long-term relationships with other
suppliers, or whether the relationships are more of an ad hoc nature.
- Please indicate whether your relationship with the DTC is, or would be, at
all affected were you to purchase rough diamonds from other sources. Do
you consider that there is any de facto exclusivity in your relationship
with the DTC?
- If you purchase exclusivity from the DTC, please describe
your rationale for doing so, and indicate what benefits this brings to
your operation (for example in terms of lower transaction costs, etc).
- In what way would your business be affected if your company no longer had
access to DTC supplies? How would that affect your costs?
- Please
explain the nature of your relationship with the DTC for the last five
years up to the present. Please include a description of how you have
resolved any contractual or other disagreements you have had with the DTC
and how this relationship could be terminated - either by you or by the
DTC.
- Please explain in detail a full annual cycle of how the "box system" works. In your description, please include details of the
information you provide to the DTC, the information they provide to you,
the opportunities you have to inspect the boxes before deciding whether or
not to accept them, etc.
- In your view, are the contents of the boxes
predictable, or do they change significantly from sight to sight? Please
explain whether this causes any particular difficulties for your
business.
- In the last three years, how many times have you been refused
a box that you have asked for? In such situations what are the options
available to you?
- In the last three years, how many times have you
refused to accept a box? What were/would be the consequences thereof to
you and to your relationship with the DTC?
- Do you consider that the
'Supplier of Choice' arrangements put in place by De Beers and to be
implemented as from July 2001 will offer consistency and efficiency of
supply for your company's business? Please explain.
- Do you consider
this selection process to be based on objective and non-discriminatory criteria? Explain your answer.
- Provide your understanding of the
selection process proposed by De Beers in its "Supplier of Choice" arrangements.
- In what way does the new "Supplier of Choice" initiative change any feature of the 'box system' as described above? If so, which ones?
- Would you envisage another distribution system than "Supplier of Choice" which would be more efficient for Sightholders? Please explain.
- Do you think that the information requests (contained in the " DTC Sightholder profile") in view of the selection process by De Beers go beyond what is strictly necessary for efficient distribution of rough diamonds? Please justify your answer
These are reprinted with permission of TACY and Chaim Even-Zohar.
Government Questioning of Sightholders is not Unprecedented
TNS - May 17, 1001 The present demand by competition authorities for sightholders to provide intimate details on their business is not without precedent. About seven years ago U.S. sightholders were subjected to a similar exercise. It may be interesting to recall their circumstances. Though the Sherman Antitrust Act of 1890 is America's oldest antitrust legislation, it is not the only statute covering competition issues. The U.S. sightholders were questioned based on the authority provided by that nation's second antitrust statute, from a chronological perspective, the Federal Trade Commission (FTC) Act of 1914.
The objective of the FTC legislation was to create a special agency that could perform both investigatory and adjudicative functions. Prior to its enactment, the Antitrust Division of the Justice Department was the sole enforcement agency in antitrust matters. The FTC Act also contained a section that outlawed 'unfair methods of competition'. It was the possible violation of this Act that triggered in 1994 investigations not so much against the cartel, but rather against the sightholders, the clients of the cartel in the United States.
The Federal Trade Commission has the power to enforce other antitrust legislation such as the Clayton Act and the Robinson-Patman Acts (but not the Sherman Act), and to challenge, in the words of the U.S. Supreme Court, 'an unfair competitive practice even though the practice does not infringe either the letter or the spirit of the antitrust laws'. Thus, the reach of the operative provision of the Federal Trade Commission Act (Section 5) is at least as broad as all the other U.S. anti-trust legislation combined. To some extent, the Federal Trade Commission Act represents a duplicative, or complementary, enforcement regime, depending on one's viewpoint. It is also 'flexible', making it the perfect vehicle to intimidate De Beers' U.S. trade contacts and clients.
As amended in 1938 by the Wheeler-Lea Amendments, the present Federal Trade Commission Act also prohibits unfair or deceptive acts or practices, whether or not they constitute 'unfair methods of competition'. The act is thus the centerpiece of the federal consumer protection regime. It is indeed the preoccupation with the consumer interest that is shared by both the European Commission and the FTC approaches.
In America, the overlapping jurisdiction is, at times, intentionally used in antitrust investigations. So while a price-fixing trial against De Beers (in Ohio) focusing on industrial diamonds was going on, the FTC simultaneously launched a large-scale investigation of De Beers clients of rough gem diamonds, the sightholders, in the United States. In a document (dated August 26, 1994), the C.S.O.'s U.S. clients were informed that, "The Federal Trade Commission's Bureau of Competition is conducting a non-public investigation to determine whether diamond suppliers may be engaging in or may have engaged in unfair methods of competition or unfair acts and practices in violation of Section 5 of the Federal Trade Commission Act, 15 U.S.C. & 45, as amended, by restricting the sale of gemstone quality diamonds in the United States market. This letter requests that you cooperate with this investigation by searching for and providing copies of the relevant documents described in the attached document request. Upon receipt of this letter, steps should be taken to preserve from destruction all documents which are or may be responsive to this request, or which may be relevant to the investigation at a later date."
Most U.S. sightholders voluntarily complied (giving confidential data covering four years of business) in order to avoid being issued formal subpoenas. When the price fixing suit against De Beers and General Electric was dismissed, because of lack of evidence, the investigation by the FTC was simultaneously terminated. The main reason for lack of evidence was the refusal of De Beers to show up and to present documents. As De Beers' non-appearance was seen as the very reason the government couldn't make its case stick, the government left the indictment against De Beers in force until this very day.
De Beers sells rough to its New York clients in an indirect manner, through brokers, who take and pass title of the goods in London, well before shipment to the U.S.A. This enables De Beers to have important customers in New York, in spite of its uncertain legal position in that country. As far as we could ascertain, the sightholders didn't suffer any negative consequences from their disclosures to the FTC.
Reprinted with permission of TACY and Chaim Even-Zohar.
Supplier of Choice Postponement
The DTC officially informed its clients of the postponement of the
Supplier of Choice program. In a recent article, Chaim Even-Zohar wrote that "an interesting legal situation was about to be created" because of the postponement and explained it as follows:
- The DTC gave notice to its clients, on 13 July 2000, that existing arrangements for supply would come to an end on 12 July 2001 (or such earlier date as is agreed with the clients).
- The new documentation which it sent to DTC sightholders would, with effect from 12 July 2001 (or such earlier date as is agreed between the parties) govern all future arrangements between the DTC and its clients
- It wasn't clear what the formal status of the sightholders would be as result of the postponement.
- Technically, any sightholder applying for - and receiving - a sight in August [2001] or thereafter, could conceivably claim, or conclude, that he had been approved for Supplier of Choice and thus the first two-year contract would have come into effect.
- So even though the DTC (and our publication/MUB) had prominently mentioned the postponement, Gary Ralfe, for and on behalf of the DTC, informed each client and potential client in writing about the postponement, and thus formally amending last year's communication.
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Ralfe noted: "As you may be aware a review of our future supply arrangements, at our request in order to obtain certain regulatory approvals, is currently being carried out by the European Commission. As this review has not yet been completed, we believe it would be more appropriate to delay implementation of Supplier of Choice under the new documentation for a short time."
- In another article, on www.diamondintelligence.com, in July 2001, Gary Ralfe stated, "The unfortunate consequence of that is the uncertainty that our new arrangements have created in the market persists. I don't know whether it's two or three or four months longer than it was going to be, and that's not nice for the market. But there it is, it can't be helped.
"I feel that these new arrangements are so important, for both ourselves and our clients. This is such an important springboard for what we want to see as much more dynamic partnerships between ourselves and our sightholders, between ourselves and the leading diamantaires of the world. We think it is worth waiting the extra three or four months. Hopefully well before the end of the year [2001] we shall be able to move on to formal implementation."
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