August 18, 1999
ABC News Questions Diamond Value
"We will smash the conventional wisdom on diamonds," said Charlie Gibson, host of "World News Tonight" on ABC yesterday evening. So began the network's report challenging the value of diamonds by questioning their rarity and citing De Beers' stockpiles.
"While diamonds are perceived as more special than other gems, they are no more rare or precious," said correspondent Betsy Stark in a report at the end of the nightly news program. "In fact, 1-ct. rubies, sapphires and emeralds are more rare than 1-ct. diamonds, and yet the diamonds are typically more expensive." She quoted Nicholas Oppenheimer, chairman of De Beers, as saying diamonds are intrinsically worthless except for their emotional value.
De Beers spends some $200 million a year in ad campaigns "that have helped convince young men everywhere to spend, on average, two months' salary for a typical engagement ring," Stark reported.
She explained how De Beers exerts its muscle as a monopoly to control sales prices by limiting distribution, telling viewers that De Beers currently sits on a stockpile of $5 billion in unsold inventory. "De Beers does what it must to protect the diamond dream," Stark said. "A fantasy really, that rests on the conventional wisdom that diamonds are uniquely valuable and forever."
The broadcast included interviews with Martin Rapaport, publisher of the Rapaport Report, who discussed diamonds as an international symbol of commitment, and Tim Capon, executive director of De Beers' Central Selling Organisation, who defended De Beers' control over supply. "Our stock at the moment is a little above one year's sales. I don't think that is an excessive amount to be holding," Capon said.
- by Robert Weldon, G.G.