29 Feb 2020
DiamondWorld Directory
Home |
News
Home
Future of De Beers ‘London Mix’ uncertain
The big question in the industry is: what will happen in the next few years?
By: Diamond World News Service
|
Oct 22 2005 12:00AM
|
Reference: 50  

DecreaseIncrease

IT’S just four months to go before the hand-over that will see Diamond Trading Company (DTC), managing director Gareth Penny take over as De Beers managing director, the legacy of the company’s London-based distribution arm, which has long controlled sales on the world rough diamond market, could end, says Emma Muller in Business Day. That is what De Beers’ biggest shareholder, Anglo American, signalled last week. The big question in the industry is: what will happen in the next few years?

A side effect of Supplier of Choice has been the commoditisation of diamond brands, which some fear could lead to a price war and fashion fatigue. Forced gravitation to southern Africa, and failure to achieve stated goals, have put it on the backburner. Supply-chain changes could mark a renaissance for rough dealers, who under Supplier of Choice have been required to change into value-added, brand-oriented businesses.
“There is going to be a very important role for dealers as the shift moves away from downstream investments advocated by major rough diamond producers,” said IDH’s Daniel Horowitz. “We expect to see a lot of goods that will no longer be manufactured for downstream requirements and need to be channelled via dealers.”

IDH is challenging De Beers in a European Commission antitrust case for alleged abuse of power relating to Supplier of Choice, by removing it from the rough dealer customer list. The market fears De Beers may no longer offer consistent supplies via its “London mix”, a level of consistency in volume that improved under supplier of choice and which other producers cannot match. The hardest hit would be small to medium-sized diamond companies that have changed their business model to comply with Supplier of Choice, and rely on DTC’s consistency of supply to sell their products downstream. Several major sightholders have moved to Botswana, South Africa and Namibia to secure rough diamond supplies. There is little chance of a major factory exodus to India and China, which have recently changed into low-cost, high-tech manufacturing hubs. But India is wary of seeing rough supplies curbed. Others are waiting to see De Beers’ new focus.

The DTC over the past few years under Penny has focused mainly on its Supplier of Choice policy designed to rid De Beers of its antitrust problems, grow demand downstream, and generate higher prices for its rough. Hefty marketing and advertising campaigns for the policy have been an important driving force for increasing awareness in growing markets such as India. But De Beers managing director Gary Ralfe told analysts last month that growth had been disappointing. De Beers remains the cheapest producer on the market and its antitrust problems in America and Europe have not been solved, five years after initiating the policy.

Have Your Say
* Your view
* Name:
* Email:
* Town/city:
* Country/State:
Advertisement
HouseAd_Trade Fair
Search News by City
Advertisement
Kosher 23460
Advertisement
HouseAd_Trade Fair
Recent Issue
2019
AVAILABLE NOW...!
Advertisement
Kosher 23460
News in Pictures
Videos
Young Diamantaires
Pictures: 16
Stunning Jewellery from Cannes 2019
Pictures: 24
Sparkly Jewels at Oscars 2019
Pictures: 19
Golden Globes 2018
Pictures: 15
Spotted: Who Wore What (December 2018)
Pictures: 4
India Diamond Week
Pictures: 8
Spotted: Who Wore What (October 2018)
Pictures: 7
Spotted: Who Wore What (September 2018)
Pictures: 6
70th Emmy Awards
Pictures: 11
35th India International Jewellery Show 2018
Pictures: 46
JJS - IJ Jewellers Choice Design Awards 2015 powered by GIA
Views: 24438
GJEPC Chairman Interview
Views: 22071
IJ Jewellers Choice Design Awards 2012 - Part 1
Views: 29241
Promo for IJ Awards 2012 at NDTV Profit
Views: 42712
IJ Jewellers Choice Design Awards 2012- Part 2
Views: 45074
Couture India 2016 - A Business Boutique Show by IJ Magazine
Views: 17848
Savjibhai Dholakiya, Surat Businessman (Diamond Merchant) speaks in Vibrant 2015
Views: 42995
IJ Jewellers Choice Design Awards 2013 - NDTV Video
Views: 41008
Advertisement
Finestar Diamonds
Advertisement
M.Tarun
Member of:
Supporter of: