De Beers’ Diamond Trading Company (DTC) has “shocked and awed” the industry with its new sightholder list, reportedly lopping off some of the biggest names in the industry.
At press time, rumors and counter-rumors were flying thick and fast, with much speculation as to who was staying and who was going. The only thing known for sure was that the DTC had, in its words, “confidentially advised applicants with regard to their future status as sightholders.” There was talk that as many as 35 sightholders had been axed and eight or nine new ones added.
Among the widely mentioned names were at least two companies considered institutions in their respective centers. Several people who hold or have held prominent leadership positions in diamond associations also did not make the cut. At least one was giving a seminar at The JCK Show ~ Las Vegas the day the decision came down.
Although the DTC had promised the selection process would be “objective”—partially analyzed by computer and based on previously announced criteria—many were mystified by the choices. The DTC had indicated that marketing programs would factor heavily in the revised list—yet several companies that had invested heavily in marketing still didn’t make the cut.
Reaction from the dropped sightholders ranged from the philosophical to the unprintable. Some had expected they would stay and seemed blindsided by the decision. Some hoped the decision was not final and said they would take advantage of the newly instituted appeal process. A principal of one New York company even flew to London to make a personal plea to DTC management.
Analysts noted that while losing a sight can cause disruptions in supply, the biggest blow might be in prestige. A DTC statement seemed to acknowledge this when it said: “Not qualifying for sightholder status under Supplier of Choice is no criticism of a client’s business. The DTC holds those businesses in high regard. Where the DTC will regrettably no longer be able to supply them, this has followed, in almost all cases, from competition for limited supplies of particular goods.”
India, not surprisingly, was the big winner. By most estimates, it was the only center to gain sightholders, solidifying its status as the dominant diamond center. New York, Antwerp, and Israel did not fare as well, with New York faring particularly badly: It lost at least half, if not more, of its current dozen-odd sightholders.
At press time, it wasn’t entirely clear who had been added. It was confirmed that one New York firm, Dynamic Diamond, was on the list, and new Indian sightholders include S. Vinodkumar, Shree Ramkrisha, and Venus Jewels. An Israeli company, EMA, also sent out a notice saying it had been appointed a new sightholder.
De Beers left the door open for some of the companies to come back once its new contracts with sightholders expire in two years: “DTC hopes to be considering, in early 2005, applications from these clients for readmission as DTC sightholders.”
The DTC said of the current sightholder list: “What they have in common is a commitment to driving demand for diamonds, a passion for protecting the integrity of our unique product, a shared vision regarding the future of our industry, and a track record of achievement.”
The nixed sightholders will continue to get their allocations through the end of the year.