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
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