...DEBORA SPAR Forever: De Beers and U.S. Antitrust Law Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F267708 CoursePack code C-788-275379-STU “As a worldwide dealer in enchanting illusions, Disney has nothing on De Beers.” - The Economist1 In 1999, a series of spectacular advertisements adorned the bus-sides and billboards of major American cities. Set against a lush black background, the ads displayed a perfect set of diamond earrings, or a single sparkling solitaire. The lettering, in white, was sparse and to the point: “What better time to celebrate the timelessness of love?” they asked. Or, “What are you waiting for, the year 3000?” Some were even more direct: “This wouldn't exactly be the year,” they noted, “to give her a toaster oven.” Coyly, the ads captured a joint fascination with the new millennium and the enduring allure of diamonds. How better to capture time than with a diamond, they urged. How better to herald eternal love? Indeed. According to analysts, U.S. diamond sales (30% of which occurred during the Christmas season) were expected to surge by more than 10%, hitting a high of over $20 billion for 1999.2 A significant portion of this windfall would flow to De Beers, one of the world’s most successful corporations and the controlling force of the international diamond market. There were many ironies behind De Beers’s millennial campaign, not least of which was that diamonds — those eternal...
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...The Price Of Diamonds Is Too High There are many arguments about the price of diamonds being too high considering that diamonds are not actually a scarce resource. Up until recently only De Beers controlled the diamond industry making the diamond industry monopolistic. (Zimnisky, 2014) However, over the last 25 years a series of events led to the dismantling of the De Beers monopoly. De Beers no longer has complete control over the diamond industry and instead it is market forces, not the De Beers monopoly, driving the diamond market. (Zimnisky, 2014) The following essay will discuss what events led to the dismantling of the De Beers monopoly, the role of the diamond cartel in determining the price of diamonds as well as the history of the diamond cartel. diamonds in South Africa and businessman Cecil Rhodes purchased as many diamond mining claims as he could including the farmland owned by the De Beer family. (Zimnisky, 2014) Eventually, Rhodes had acquired enough properties of the majority of the world’s supply of rough diamonds and he called his company De Beers Consolidated Mines Limited. De Beers effectively influenced all the world’s rough suppliers to sell production through the de Beers channel, acquiring full control of the global supply not produced by the de Beer mines. (Zimnisky, 2014) This power gave rise to the diamond cartel. De Beers is the dominant company in the industry and has been around since 1880. (FALL, 2007) Since 1925, the Oppenheimer family...
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...The makers of “Blood Diamond,” an exceptionally thriller starring a most excellent Leonardo DiCaprio, want you to know there may be blood on your hands, specifically your wedding finger. The story involves so-called conflict diamonds, illicitly mined stones that have been used to finance some of the most vicious wars in Africa. If films were judged solely by their good intentions, this one would be best in show. Instead, gilded in money and dripping with sanctimony, confused and mindlessly contradictory, the film is a textbook example of how easily commercialism can trump do-goodism, particularly in Hollywood. The 2006 movie (Blood Diamond) was recently seen by me, this is an American political war thriller film produced and directed by Edward Zwick, starring Leonardo DiCaprio, Jennifer Connelly and Djimon Hounsou. The title refers to blood diamonds, which are diamonds mined in African war zones and sold to finance conflicts, and thereby profit warlords and diamond companies across the world. During Sierra Leone Civil War in 1996–2001, the film shows a country torn apart by the struggle between government soldiers and rebels. It also portrays many of the atrocities of that war, including the rebels' amputation of people's hands to discourage them from voting in upcoming elections. The film's ending, in which a conference is held concerning blood diamonds, is in reference to an actual meeting that took place in Kimberley, South Africa in 2000 and led to the Kimberley Process...
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...DeBeers “A Diamond is Forever” Prepared April 16, 2012 For decades, De Beers has been the preeminent name in diamonds. Thanks to a stockpile of the world's rough diamond supply, indelible marketing schemes and even negotiations with foreign governments for their diamonds, De Beers has been the most important name in one of the world's most lucrative businesses for almost a century. This paper will review the billion dollar rise and fall of a monopoly that has crushed competitors and cash-strapped governments since the 1800s. Diamonds became a symbol of love thanks to De Beers, which is fitting, since De Beers became what it is today because of a love story: the love of money. In the beginning, the diamond trade took place mostly in India and Brazil. With the discovery of diamonds in South Africa, the trade simultaneously took off and became much less profitable. Up until the mid-1800s, diamonds were a rarity and could be seen only on the hand of a monarch. But the diamond rush that began in South Africa in the second half of the 19th century flooded the market with diamonds, killing demand. It would take some ingenious plotting and advertising to keep the diamond's reputation as intrinsically valuable and desirable, which is where De Beers comes in (Goldschein, 2011). Company History and Overview De Beers got its start when English-born businessman Cecil Rhodes, broke into the diamond business in South Africa by renting water pumps to miners before buying diamond fields...
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...depicts the adverse effect of diamonds on the people of Africa. It also addresses the real price of diamonds which it believes to be the lives of millions of Africans. Additionally, it examines the response from the United Nations and question if enough is being done to crack done on the sale of blood diamonds. The famous phrase “Diamonds are Forever” is known to most people all over the world. What most people do not know is where most of these diamonds are coming from and how they came to become perfect gestures of love and romance. Looking at a clear cut diamond ring, it is hard to imagine the possibility of thousands of innocent people being murdered, tortured, and forced to mine for these stones; unfortunately that is the case in Africa. Diamonds in West Africa have been used for the last 30 years to fund rebel groups and their desire to take control of their nations by violence and intimidation. In such conflicted regions of the world, diamonds lose their connotation of beauty and elegance and are stained with blood. In this paper, I will discuss the many ways in which “conflict diamond” has brought nothing but poverty, suffering and war to the West African people. I will further explain what world organizations such as the United Nation have done in order to counteract the adverse effects of the conflict diamond on the African community, and the extent to which such efforts have been successful. Conflict diamonds are diamonds illegally traded to fund conflict...
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...DE BEERS De Beers is a market maker in the diamond industry as it acts as a liaison between the producers and retailers of diamonds. It captured and coordinated the market of distribution of diamond production through a reliable and stable stream of quality diamonds. DeBeers has been a highly successful and effective controller of the diamond market, having developed a unique purchasing and marketing cartel that has influenced prices in the market for almost a century. Since the company was founded in 1888, De Beers followed a strategy of supply control. In addition to mining its own diamonds, it bought diamonds from other producers controlling about 90% of the world's diamonds. The United States was far and away the world’s biggest purchaser of diamonds accounting for 46% of total demand followed by the Middle East with 12% and Japan with 9%. De Beers has advertised, for a long time, using the caption ‘A diamond is forever’, does the same apply for De Beers’ business model and strategy? Over 80% of the world’s diamonds were traded through the De Beers CSO until 1990s. De Beers’ tight control and regulation over a vast amount of supply and optimization of the timing of release through the CSO enabled it to keep prices high for diamonds successfully creating a notion that diamonds are scarce. The CSO served as a clearinghouse for the entire industry. Suppliers were forced to sign an exclusivity requirement with the CSO. It regulated the quantity and price in the market...
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...Forever: De Beers at the Millennium – Study Questions 1. Who writes the rules of the international diamond market? How are they enforced? * De Beers and the other diamond companies of the their time and specifically the Central Selling Organization (CSO) and the government partners where they are mining (?) * Their sorting process and the which went through many different grades that measured the 4 Cs: carat, color, clarity, and cuttability (?) 2. How has De Beers structured its relationship with the U.S. diamond dealers and the U.S. government? Are these relationships sustainable? * Most expensive stones were cut and polished in New York. The U.S. was the biggest market for De Beers. The Gemological Institute of America (GIA), the largest, most respected nonprofit institute in its field, had developed the widely-used D-Z color scale and the Flawless-I3 clarity scale for polished diamonds. De Beers had irked U.S. authorities by failing to appear, in 1994, in a suite by the Department of Justice alleging price-fixing in industrial diamonds in which it was a co-defendant along with General Electric. And socially, the diamond industry began to be criticized for dealing in “conflict diamonds” from African countries. (?) * These relationships cannot be sustainable (?) 3. What should the U.S. government do about the flow of diamonds from Angola, the Congo and Sierra Leone? What should De Beers do? * Continue the fight started by the...
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...cure, eventually finding one with the help of one of Hephaestus’ men and a sun god. After his sight was restored, he retired to the island of Delos and became a skilled archer. He was so talented he caught the eye of the goddess of hunt, Artemis. He soon became her favorite, and they would often go on hunts together, slaying monstrous beasts. He desired to marry the goddess, however Apollo disapproved as Artemis is a virgin goddess. During Orion’s swim out to the sea Apollo bet that Artemis would be unable to hit the dark blob floating around in the sea. This was the cause of Orion’s death, as Artemis was the goddess of archery; her arrows never missed their marks. In sorrow, she placed his body to the sky as a constellation, so he would forever be remembered. There are various other versions of this myth; however this version was the one that is the most...
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...according to the rubric so I decided to go with something that has interested me since seeing a movie on it a couple years back. Blood diamonds are one of Africa’s largest problems and have been for many years now. The point my article stresses are that blood diamonds are one of the largest sources of income for rebel groups in Africa. “Conflict diamonds continue to fund the rebel groups, the National Union for the Total Independence of Angola (UNITA) and the Revolutionary United Front (RUF), both of which are acting in contravention of the international community's objectives of restoring peace in the two countries.” Many innocent civilians are murdered by these rebel groups and it all reflects to the main point of how these rebel groups are staying in business. I think that there is also another point of view which would be the pro’s of this conflict. Some of them would be that the blood diamonds keep many jewelry and diamond companies in business because it helps them to offer a far more variety of diamonds to their consumers. Also it keeps the market saturated with diamonds so if there were no conflict diamonds then it would sky rocket the price of the few diamonds that exist and that would effect the industry due to the fact that many advanced countries like the U.S, Asia, Europe and etc are very large consumers to these diamonds. I would like to research this topic a lot more because it generates a lot of injustice and oppression within the country of Africa and...
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...Market Structures The diamond industry is a lucrative industry that consists of segments that processes, mines, and markets industrial and gem diamonds. The start of the diamond industry was in India and Brazil. Before the mid-1800s diamonds were rare and only seen on monarchs. Before diamonds were discovered in South Africa the diamond trade industry was more profitable. However, the discovery of diamonds in South Africa initiated the simultaneous trading of diamonds that flooded the market with diamonds. Among the industry giants is De Beers. For over a century De Beers has controlled a significant portion of the diamond industry. De Beers Consolidated Mining, Ltd was formed in 1888. The forming of De Beers Consolidated Mining, Ltd created a monopoly for all diamonds produced and distributed from the diamond mines of South Africa. The market structure in which De Beers competes in is considered to be a monopoly. The fact that De Beers has the control over the distribution of rough diamonds clearly establishes a monopoly in the diamond industry. This market structure differentiates from other market structures uniquely because De Beers has dominated the market by having sole rights to sale rough gem quality diamonds. Even though other organizations within the same industry exist worldwide, De Beers is unique in the market because of the monopoly. A competitive strategy used by De Beers is controlling the market by limiting the supply of rough diamond to other companies because...
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...gorgeous way to symbolize your marriage, and to tell your partner that you believe this union is forever. So who’s to say that wedding rings are the only way to unify a marriage? Traditionally, couples exchange wedding rings to unify their marriage. Now days a lot more couples have chosen a different alternative to proving their love for one another. “It’s an important physical symbol of commitment” (Mcneil, 2008). Wedding ring tattoos have become more popular, especially with the celebrities. Celebrities such as Kathy Griffin, Ashlee Simpson, Jenna Jameson, Howard Stern, Hulk Hogan, Tommy Lee and Pamela Anderson are known to have a tattoo symbolizing their dedication to their significant other. Even Levi Johnston, was said to have “Bristol” tattooed on his ring finger. In addition to celebrities having wedding ring tattoos, many everyday people are getting these tattoos as well. Because of the profession they work in many Doctors, mechanics, plumbers, roofers, personal trainers, and welders are not able to wear their wedding bands all the time. So they decide to get a tattoo on their ring finger to represent they are in a unified commitment. Although a diamond, or a band of gold are how people generally symbolize their love for one another, they should not put so much focus on the ring itself. Anything can be a symbol of love. Even a tattoo in place of a big shiny diamond ring. If you are marrying the right...
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...An adventure through Jared Diamond’s eyes showing how he came to learn that these were the reasons the Europeans were so successful in the new world. Jared Diamond proves that farms, diseases, and weapons are the reasons the Europeans were successful in the new world. Jared Diamond seeks evidence to be able to show the world that these reasons are true. Will he be able to prove to the world that these reasons are true? The Europeans had farming on their side in the new world. Their civilizations had wheat and barley to farm, which was more nutritious and easier to grow and plant than anyone else’s crops in the new world. An advantage to this was that animals could be used to pull the plows to help farm. Also, wheat and barley could be stored for years before it went bad and all of the other civilizations in the new world did not have crops that could be stored for extensive periods of time. All the animals working caused farms to be more efficient and crops to harvest faster. Finally the animals would spread diseases, but the Europeans would not get them anymore because they developed immunities to the diseases unlike natives the Europeans would encounter....
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...Conflict Diamonds in the early 2000s, a common concern emerged among members of an oddly matched group : the diamond industry, the united nations, several goverments, and human rights campaigners. All wished to end the trade in conflict diamonds, gemstonesthat are mined or stolen by rebels fighting internationally recognized goverments. The $6 billion a year diamond industryhas long been dominated by the De Beers Corporation. Founded in south Africa by Cecil Rhodes in the 1880, the beers strategy has been to own as many diamond mine as possible and to sell its rough (uncut) stones exclusively to a small group of preferred dealers at prices set by the company. To maintain its control over supply, De Beers operated buying offices all over the world, “sweeping up” diamonds produced in mines operated by others. The result, for many years, was a virtual monopoly. De Beers has also been a shrewd marketer, pouring millions of dollars over the years into advertising. Using the slogan “a diamond is forever”, the company cultivated and association between diamonds and romance. The company first promoted solitaire engagement rings, later, it shifted its marketing focus to the so called eternity ring, a band of multiple smaller stones aimed at older married couples. In the early 1990s, event in several diamond-rich African nations converged to tarnish the gem’s carefully cultivated image of love and purity. During the cold war, many partisans in civil conflicts in Africa received funding...
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...ENGL 1157 05/05/2013 Blood Diamond I think, Blood Diamond could have been little shorter. While the film includes a number of political and sociological insights, the story is tepid and loses momentum as the storyline bogs down. The main character, played by Leonardo DiCaprio, has an effective arc that is believable because it does not force him to act contrary to his nature, but it takes a long time for Blood Diamond to get us to DiCaprio's moment of recognition. Pacing issues aside, this is a well constructed movie and clearly the product of a director who understands how to make a top-notch motion picture. It looks great and sounds great. If only Edward Zwick's mastery of the medium had extended to pruning the screenplay and editing the final result, Blood Diamond might have been a great film rather than one worthy of only a lukewarm recommendation. The story takes place in 1999 Sierra Leone, when the country is embroiled in a civil war. In this case, it's hard to determine which side is worse: the government or the rebels. As is often the case in this sort of bloodbath, atrocities abound and it's the innocent farmers and villagers caught in between who pay the price. Diamonds, one of the country's largest exportable commodities, are being smuggled out and purchased on the open market despite a supposed international ban on the purchase of so-called "conflict diamonds" or "blood diamonds." This historical background is accurate, although the three primary characters...
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...as new sources of competition and suspicion about conflict diamonds, Gareth Penny had to rethink the basics A diamond may be forever, as De Beers' famous advertising slogan contends, but is the same true of a business model? That was the question facing Gareth Penny, managing director of De Beers, in the late 19'90s, when the famed diamond cartel found itself beset by a series of events that ultimately forced it to examine and then retool its business strategy. Since the company was founded in 1888, De Beers followed a strategy of supply control. In addition to mining its own diamonds, it bought diamonds from other producers and had what it called the "central selling organization," controlling some 90% of the world's diamonds. Its tight control over such a vast amount of supply enabled De Beers to keep prices high for a commodity that is neither particularly scarce nor useful. If a competitor offered diamonds on the market outside of De Beers' central selling organization, De Beers would simply flood the market with similar stones, thus eliminating any pricing power the competitor might offer. By the end of the 1990s, the business model of controlling supply and managing how much of its inventory went to market at any time was no longer effective: New sources of diamonds were discovered in sufficient quantity that they could be sold competitively outside of De Beers' central selling organization. Demand for diamonds was dropping at a time when demand for other luxury goods...
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