Following the Jewellers Association of Australia causing an industry furore when its chief executive officer Ian Hadassin endorsed Rapnet, an international diamond trading platform, 11 local diamond merchants have written an 'open letter' calling on Hadassin to explain what the JAA received from the Rapnet promotion.
The letter pulls no punches, saying that Hadassin’s email to members was “misinformed and misleading”.
“Following your recent attack on the wholesale diamond market in Australia (many of whom are members and are generally supportive of the industry), we think it is important that you fully explain your motivation and actions,” the letter reads.
The uproar began when Hadassin sent an email inviting JAA members to join Rapnet even though Rapnet has no Australian or New Zealand office and is part of the US-based Rapaport Group.
The email read: “JAA, in cooperation with Rapnet – a Rapaport service, invites you to participate in this special offer for JAA members only: get 13 months membership for the price of an annual subscription.”
Many suppliers felt that the JAA was promoting overseas trade against the association’s own members.
The local diamond wholesalers’ letter states, “Your recent letter [email] encouraging retailers to search Rapnet listings in order to gain a competitive edge was misinformed and misleading. Your assumption that some retailers are not sourcing competitive priced product by dealing locally is simplistic and incorrect.
“Unfortunately your views reflect a lack of understanding by the industry and retailers at large on the role of gem merchants within the industry, and the costs associated with performing this role,” the letter reads.
The letter then outlines a long list of benefits local diamond merchants provide to retail buyers and the trade in general, including financing, providing goods for approval and on consignment, education and training and many more.
These issues were raised because Hadassin was perceived by many as providing a glowing endorsement of an overseas business, and his email raised all of the benefits of Rapnet without mentioning any of the disadvantages of buying from overseas diamond dealers.
The open letter aims to provide a balance to this issue so that local buyers are aware of the value local merchants bring to the wider industry.
Ian Hadassin, CEO Jewellers Association of Australia
The JAA’s actions were made worse because it was later discovered that Hadassin’s original email endorsing Rapnet was only sent to JAA retail members and the 11 signatories also ask Hadassin to explain why JAA supplier members did not receive the same email.
“Are there now clearly designated divisions of membership which excludes some from receipt of information?” the letter queried.
Jeweller understands that Hadassin sent the email without Board approval or knowledge, which caused enormous embarrassment when Board members began receiving telephone calls about the matter.
One question that has been continually asked, and still remains unanswered is, “Why did the JAA endorse only one business (Rapnet) when there are others offering the same service?” while many in the industry have been asking, “What was in it for the JAA?”
The diamond merchants’ open letter also tackles that issue by asking Hadassin, “We ask for total transparency as to what you and the JAA are receiving in return from this promotion.”
Jeweller contacted Hadassin on May 4 asking him to clarify whether the Board approved the JAA’s endorsement of Rapnet and if not, why, but to date he has not replied.
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