April 20, 2022 4 min read
The De Beers Story of Manipulation of the Diamond Industry
Globally, every year the diamond market is estimated to be 30 billion dollars. Diamonds generally have no practical use to everyday people. “The De Beers” corporation was founded in 1888, and currently owns at least 85% of the total diamond industry. They are specialized in diamond mining, trading, retailing, exploitation, and other manufacturing industrial sectors. They are famous for influencing the supply and demand in order to control diamond prices.
How De Beers started it all?
Before 1870 diamonds were rare and unique, and then several diamond mines were discovered in South Africa. So, in 1888 De Beers was founded as a major central company for the diamond industry.
Diamond Prices Monopolized
The De Beers Consolidated Mines Corporation was created successfully and took full ownership of trading diamonds all over the world. They stocked diamonds, they sold diamonds, the manipulated the supply chain, and they influenced governments. In the end, De Beers won and effectively controls the supply of both mined diamonds and lab made diamonds.
Stabilization of the diamond market
To stabilize the diamond market, De Beers needed to find new ways to control both supply and demand of the diamond market all over the world. To accomplish this, they hired a Philadelphia ad agency titled “N.W. Ayer” in 1938 to propagate their ideas on social attitudes toward diamonds versus other gemstones. Then they created a narrative on how why to buy more diamonds in a bad economy. De Beers used media to target the emotional and vulnerable while manipulating social factors with couples creating a situation where everyone had to buy a diamond ring in order to have a valid engagement and marriage. They did this by making diamonds the exclusive engagement gem over all other emerald, rubies, and sapphires. And at the time, there was a certain logic to diamond since it was the toughest and most brilliant of those gemstones. However, now with the advent of high quality moissanite that performs as well or better (e.g., Jewel Eternal), there is no good reason to use diamond.
Into the 1990s, De Beers continued to dominate and control the diamond market. As a market machine with monopoly control in conjunction with social and political campaigns, De Beers continues to control the price, supply, and relative demand of the diamonds.
Ultimately, we think De Beers will not succeed since people do not really need diamonds (especially when there are viable modern alternatives) and they are actually not as scarce as they would have you believe.
At that time, prior to the De Beers campaigns, only a few people around the world gave diamond rings to their loved ones on special occasions. Other gemstones were very common in engagement rings including emeralds, rubies, sapphires, opals, and frequently engagement rings had no gemstone at all instead relying on beauty from the intrinsic value and beauty of precious metals and in the ring design.
Currently, about 75% of American brides wear diamond engagement rings and this number is dropping. Public awareness about the truth in diamond pricing and market manipulation, as well as the discovery of better ecological and ethical alternatives like high quality moissanite has resulted in a larger percentage of engagement rings being made with other gemstones with the greatest increase being in moissanite.
More History of Manipulation: The “Diamond Is A Forever” Campaign for Engagement Rings
The diamond market was facing a great depression and then a young copywriter at NW Ayer agency, Frances Gerety, came up with the “Diamond Is A Forever” campaign. These four words were used to completely revolutionize the diamond market and change the impression about buying diamonds into a core necessity to an engagement. The results of the campaign were staggering and from 1939 to 1979, De Beer diamonds sales jumped from $23 million dollars to $2.1 billion dollars. The “Diamond Is A Forever” was more than just a tagline, it was turned into a metaphor for a marriage and an engagement. We knew from the start that De Beers changed the social perception, monopolizing the diamond market, and compelling couples to believe that an engagement is not real without a diamond ring. The tagline symbolized the sentiments that a diamond, like your relations, is everlasting, eternal, and rare. At the same time, De Beers discouraged the people from reselling their diamonds, as they knew how fragile their market was and that those resales would reveal to customers the dramatic loss in resale value that resulted from purchasing a retail diamond from De Beers.
At the exact time that De Beers’ propagated their famous slogan a “Diamond Is A Forever,” they manipulated the market by hoarding inventory, buying market supply, and selling fewer diamonds – the result was a completely controlled and artificial price.
De Beers company is one of the successful monopolies in diamond history. They cleverly used several tactics, strategies, and campaigns to control the demand, supply, and price of the diamond market. Now the monopoly of De Beers will fell apart because technology has allowed man to create better more ethical and ecological alternatives like high grade mossianite which they cannot control.