de beers

DE BEERS
AND THE U.S
ANTITRUST LAW
PRESENTED BY:
Anuj Vadehra:PGHRM11
Honey Bohare:PGHRM27
Rajul Khare:PGHRM49
Mehec Chopra:PGHRM38
Prachi Gera:PGHRM46

DE BEERS – THE SHINE
 One of the world’s most successful longest running monopoly  Controlling force of the international diamond market
 Launched the “millennial” campaign in 1999; aimed at selling “De Beers diamond” rather than a regular diamond

THE DUST BENEATH
THE ROCK
 De Beers marketing and operating structure was in violation of U.S anti trust law ; Unable to directly sell any diamonds in U.S market
 De Beers was facing turmoil on all fronts : in western Africa, in Russia, and in their home state of South Africa

THE START OF DE BEERS
 1866 : Discovery of diamonds in South Africa
 1874 : Cecil Rhodes brought Steam-Powered Pump to South
Africa Mines
 1880 : Rhodes formed the De Beers Mining Company
 By 1887 : He had bought out all the other claim holders
 1890 : Merchant’s association formalized as the “Diamond
Syndicate”

THE DIAMOND CARTEL
 Cecil worked to consolidate the industry
 Kept the supply sharply limited
 Maintained the fragile illusion of their scarcity
 Kept prices as high as possible
 Sorted and classified a large % of the world’s rough stone
 Operated through Central Selling Organization (CSO) in London
- Determined who can buy which stones and
- How much each buyer must pay

CARTEL IN ACTION
 1902, Ernest Oppenheimer took over charge
 De Beers controlled almost all the diamonds in South Africa
 1960, South Africa contributed 19 % of the total world gemstone production
 By 1999, it was reduced to 11 %
 Diamond-producing states signed contracts with De Beers
- To sell their rough diamonds solely to De Beers and its agents
- At a price dictated by De Beers

STOCKPILING

 To keep prices high
 To convince public diamonds are scarce
 Whenever market for luxury goods threated, bought “excess” stones back

U.S. ANTITRUST LAW

 Original Legislation : Regulating the