EC Approves DTC’s SoC, Objects to Alrosa Deal

The European Commission (EC) gave De Beers its approval to the Supplier of Choice (SoC) plan, but voiced objections to its five-year deal with Alrosa.

The deal with the Russian monopoly Alrosa gives De Beers 50 percent of the Russian rough production. The EU wants that to be cut down to allow for greater competition.

"The Commission takes the view that the notified agreement restricts, to an appreciable extent, competition on the rough diamonds market by eliminating competition from Alrosa," the EU statement said, giving the companies two months to reply to the statement.

In response to the Commission's Statement of Objections, De Beers says it “welcomes the prospect of further dialogue with the Commission.” De Beers Managing Director Gary Ralfe adds "It is helpful to have a clear articulation of issues that the Commission would like us to address and we look forward, with Alrosa, to continuing our discussions in a constructive way with the Commission."

Details on the EC’s confirmation of SoC were not immediately available and what objections were raised are not known yet. Nicky Oppenheimer, chairman of the De Beers Group, says on the news "We are obviously very pleased with the Commission's positive pronouncement which means that we can now bring into effect the new arrangements under Supplier of Choice. We remain absolutely committed to working in partnership with our clients in building a dynamic, competitive and consumer-focused industry."