EU Seeking Comments on Alrosa-De Beers Proposals
June 05, 05
The European Commission invited “interested parties” on Friday to comment by July 3 on commitments made by Alrosa and De Beers regarding rough diamond trade between the two companies.
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The commitments offered by Alrosa and De Beers were made in a case under EC Treaty rules outlawing cartels and abuse of monopoly power involving the market for rough diamonds, namely the gradual decrease in rough diamond sales by Alrosa to De Beers from $700 million annually to $400 million by 2009.
By 2011 and thereafter direct and indirect rough diamond sales is not to exceed $275 million a year, according to the proposal.
“The Commission had preliminary concerns that the volume of Alrosa rough diamonds purchased by De Beers might both enhance De Beers' market power and eliminate Alrosa as an alternative source of supply,” the Commission said in a statement Friday.
“The commitments proposed by the parties purport to address these concerns by reducing the amount of diamonds purchased by De Beers from Alrosa.”
The Commission says it may adopt the commitments, which would become legally binding as a so-called ‘Commitments Decision’ under Article 9 of Regulation 1/2003. If companies subsequently breach a ‘Commitments Decision’, a fine may be imposed.