Notes on the New De Beers Sales Policy

–   To review,
under the new policy, sightholders will get a chance to bid in Diamdel
auctions, which were previously open only to the “secondary
market.” This could be considered something of a blow to non-sightholders, which Diamdel has traditionally served. Somewhat softening the impact here, Diamdel
buyers who consistently “win” certain qualities of rough at the company’s e-auctions
will also get a chance to attain those items at sights. This is, the DTC
keeps stressing, a “pilot” program that begins later this year.

The new system will “continue to give us the opportunity to put diamonds in the
hands of people who are able to use them effectively,” Mahiar Borhanjoo, the
DTC’s director of sales and sightholder services, told me. “It doesn’t mean that
anyone can walk into 17 Charterhouse Street and purchase diamonds. But it
allows us to work with the best of the best and insure that the diamonds we are
selling are going into the hands of the right people.”

–    In addition, the sight application
process, which starts again next year for the 2012 – 2015 period, will be simplified, and the process will
include input from clients. These both seem like smart and welcome changes.

–   The new policy
puts U.S. sightholders at something of a disadvantage. For legal reasons,
American companies are still
not allowed
to bid in Diamdel auctions. Says De Beers spokeswoman Louise Prior:
“I understand that Diamdel’s current policy remains in place — that is, US
businesses will not be able to register or participate in Diamdel E-Auctions.”

–   The DTC has
stressed that this does not mean that De Beers is about to embrace tenders.

“We
are absolutely committed 100% to the Supplier of Choice process,”  says Borhanjoo. “The vast majority of De
Beers’ goods will continue to be sold through three-year contracts. We believe
in sustainable long term relationships. That is what made our company what it
is.”

– It
is interesting to see how this will evolve. There are approximately 500 Diamdel
clients. All must sign a “Best Endeavors” commitment to comply with
De Beers’ Best Practice Principles. De Beers executives have said they are looking at how Responsible Jewellery Council certification could play a role in the BPP system. So it’s possible the RJC may figure in here.

JCK News Director