Brussels, 25/07/2001 (Agence Europe) - After a detailed investigation, the Commission finally gave its endorsement to the proposed joint venture between the French luxury goods retailer LVMH Moët Hennessy Louis Vitton and the South African rough diamond specialist, De Beers. Called Rapids World, the new undertaking will be active in the retail distribution of diamond jewellery sold under the De Beers brand.
On 18 April, the Commission had decided to open a detailed investigation into the operation that could cause competition distortion in the sector (see EI of 20 April, p.13). After detailed examination, the Commission felt that the creation of the joint venture would not have a structural impact on the rough diamond market on which De Beers is already dominant. Furthermore, in the retail sale of diamonds, in which the joint venture will be active, the Commission felt that the new company, which is not yet operational, should first of all position itself on the market and would not bring injury to its rivals at the present stage. It has therefore authorised the operation.
Independently of the previous procedure, however, the Commission has sent a letter of objections to De Beers concerning a request for exemption for agreements concluded between its subsidiary, Diamond Trading Company (DTC), and buyers of rough diamonds, a request notified on 3 May by the South African group. These agreements called "Supplier of Choice Agreements" impose restrictions on De Beers' clients, restrictions that are not conform to European competition rules and which do not meet the requirements for benefiting from exemption, said the Commission.