Agreement with fellow QSs Rider Hunt and Levett & Bailey breaks down over operations in Chinese market
The global alliance between top 10 cost consultant Gardiner & Theobald and its international partners, QSs Rider Hunt and Levett & Bailey, was terminated in May following a turf war over the Chinese market, it emerged this week.
Speaking from Beijing on Wednesday afternoon, Mr SW Low, director of Levett & Bailey, said the alliance had been terminated after a row between G&T and his firm over operations in the Chinese market.
He said that Steven Fai, managing director of Levett & Bailey, was in the UK last week talking to potential new partners.
Low said: “The alliance was terminated in May. If you look at our website, there is a change in reference in relation to Gardiner & Theobald.”
He added, however, that there was still reference to the alliance on Gardiner & Theobald’s website because the firm was reluctant to make the break-up public.
Low refused to be drawn on the reasons for the alliance’s breakdown and on the names of potential UK partners. He said that for further details, Building should contact Fai. Fai, however, was unavailable for comment.
Gardiner & Theobald declined to comment, and Rider Hunt was also unavailable for comment.
A senior industry source told Building the row had occurred over the rules of engagement in the emerging Chinese market.
He said: “China has become a very lucrative market in recent times. It appears that G&T wanted a piece of the pie, but Levett & Bailey was blocking G&T from working there unless it was involved in every contract. Only the two parties know who is in the wrong – but where it leaves the Australian Rider Hunt connection remains to be seen.”
G&T wanted a piece of the pie in China, but was blocked by Levett & Bailey
Senior industry source
The source added that usually, when international firms work together in this way, problems are often caused by conflicts of interests between business opportunities and existing clients, but that these are normally sorted out quickly.
He said: “The cost of servicing international clients with no Asian partner would be troublesome.
It would be far too expensive to service the region from the UK, as the overheads of working from the UK would be too high.”
Building revealed last week that the alliance, which was formed in 1997, was in major difficulties after continuing rows between the firms.
The alliance did have more than 100 offices around the world and a combined staff of more than 2000.
Meanwhile, the future leadership of Gardiner & Theobald remained in doubt, as it emerged that there was uncertainty over who would replace Peter Sanders as managing partner when he steps down next year.
A source said: “Simon Jones was being groomed for the position, but people are whispering that he may not want the post. One potential candidate could be David Barratt, who has been at the company for some time.”