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October 1999

Diamonds:News

The Branding Fire

Diamantaires circle the wagons to protect their territory

Presidents of the World Federation of Diamond Bourses expressed continuing reservations about De Beers' actions in the branding arena during their meeting in July in Moscow.

Some dealers view the branding experiments De Beers has conducted in a few cities in England as incursions into sacred territory. De Beers' promotion of polished diamonds at the World Watch, Clock and Jewellery Show this spring in Basel, Switzerland, seemed to confirm dealers' fears. It marked the first time the cartel actively promoted its polished diamonds through distribution of brochures at a trade event. While De Beers' polished diamond division has been active for several decades, its purpose at Basel was merely to sell limited quantities of polished goods and to gauge market fluctuations and determine pricing policies, the company said.

Purpose Questioned

De Beers officials said sales of polished diamonds are necessary to keep the division solvent. WFDB members see these sales as De Beers trying to bypass them and cozy up to retailers with branded polished diamonds. WFDB and members of the International Diamond Manufacturers Association demanded – and got – Gary Ralfe, De Beers' managing director, to listen to their concerns.

Eli Haas, a WFDB vice president and president of the Diamond Dealers Club of New York City, said he had "private and frank" discussions with Ralfe. He asked if Ralfe understood branding would harm other industry segments. "His answer to me was clear: De Beers' strategic planning is driven primarily by the concerns of its shareholders," said Haas.

De Beers officials have always acknowledged the company's need to stay viable and strong in a changing diamond market.

by Robert Weldon, G.G.



Copyright © 1999 by Bond Communications.



 

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