Gareth Penny = Simon Cowell?

In a recent post, Charles Wyndham takes note of rumors that the number of sightholders may fall to fifty (from 93 now) as a result of the upcoming sightholder selection. Certainly, whatever happens, DTC officials have been hinting that there will be less sightholders after this go-round. And with its recent legal victories, the DTC likely feels emboldened to act however it wants.

But personally I hope this doesn’t happen.  Yes, the DTC’s supplies may go down, but they are not going down 50%, so there doesn’t seem to be any reason to lose 50% of your sightholders (assuming that, or something like it, is in the cards.)  And besides aren’t DTC executives always talking about new mining projects that will make up for the Alrosa shortfall?

I can’t understand the DTC’s seeming fixation with having less companies in this industry.  We may get to a point where the diamond industry is comprised mostly of big companies, but that is not how it is structured now, and if it does happen, it will be the result of natural economic forces, not because a Boston consultant wanted to make it that way. The whole Fabrikant situation shows that big companies are subject to the same problems small companies are.

As it is, there are reports of sightholders fading away and dropping out, and at least two have divisions (or formerly associated divisions) in Chapter 11.  In the next few years, the list will likely go down on its own.  De Beers of course has the right to revisit it whenever it chooses, but given their importance in the industry, shouldn’t they do it in a slower, less dramatic fashion? If Supplier of Choice 1 taught us anything, it’s that trying to do too much too fast doesn’t work.   

The whole sightholder “selection” process is starting to seem like a bad reality show, complete with public humiliation for the companies who will have to put “sightholder” on their business cards one year and take it off the next. De Beers has rethought so much in the last few years. Here is hoping they re-think this.

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JCK News Director