Aber to Offer an Open Tender Instead of an Allocation this Month

Aber will offer its goods this month in an open tender instead of its regularly scheduled allocation in Antwerp this week. Another departure is that the open tender will probably not be held at Aber’s offices, but rather at the offices of a third party, yet unknown. Aber’s clients are expressing great disappointment.

The company was suppose to supply its rough diamonds in Antwerp today to its regular clients but on Friday told them it canceled the allocation, and will notify them when the open tender will be held.

An open tender means that in addition to Aber’s regular clients, other diamond companies could compete with them for the rough. Its allocations are estimated at $20 – 25 million and the tender, it’s understood by clients, will be of the same scale with the same type of goods.

Some clients used strong words when describing the situation, one going as far as saying, anonymously, that it’s a vote of no confidence by the company in its entire system – from employees to clients.

The surprised reaction in the market is also fueling speculations to what is behind the sudden change. Aber worked hard to build a good reputation of a solid company with close and good relations with its clients.

Such a surprising move is therefore understood to not come in order to raise prices or ‘fish’ for new clients, but perhaps to test the market for prices. However, when that is done, usually a percentage of the goods are offered, not all of them.

One buyer speculates that Aber is perhaps concerned that it’s not getting the full price it could for the goods, and is therefore offering the whole allocation to get the most accurate feedback.

But the implications go far beyond. Not only that customers feel great frustration, Aber will not get an estimated $22 million today, its market position is harmed due to the expected exposure of how it sorts its goods, not to mention the strained relations that will probably come to ahead when the company takes its regular clients on a tour of the Diavik mine later this month.

At that occasion clients will meet with Aber’s management and expect to get a good explanation to what happened. For now, one such client says that such a move is so extreme and out of the ordinary that a new era is introduced to the industry.

Aber holds a 40 percent share in the Canadian Diavik mine and markets Diavik’s diamonds to a range of clients globally via ten yearly allocations at its Antwerp offices.

The company refused to comment.