Is De Beers Driving Out Sightholders?

When De Beers unveiled Supplier of Choice in 2000, the title referred to De Beers’ strategy for coping with its newly diminished market share. The Supplier of Choice would offer sightholders value-added services so that they’d pick it over its growing list of competitors.

But today, De Beers’ share of market still dwarfs that of any rival. And the jockeying to become (or remain) a sightholder remains fierce—especially now that prominent retailers and jewelry companies have joined the queue. The result, sightholders say, is a long list not of value-adding services but of ulcer-causing demands.

Sightholders, who agreed to speak only off the record for obvious reasons, complain that dealing with De Beers has become a full-time job in itself. They must complete extensive sightholder profiles, comply with ever-more-arduous Best Practice Principles, support their marketing initiatives, and now pay a surcharge for generic marketing and have their books audited.

The demands on sightholders’ time and wallets are growing so rapidly that some are whispering: Is De Beers deliberately making it so hard to be a sightholder that fewer people apply?

It might seem Machiavellian, but bleary-eyed sightholders say they can see no other explanation. Take the profiles, which didn’t exist four years ago but are now an essential ingredient to remaining one of the Supplier’s Chosen. Entire operations—from the biggest to the smallest—grind to a halt as principals fill them out, straining for the right De Beers-pleasing answers. Even the report’s presentation has turned into a high-stakes beauty contest—with each sightholder trying to one-up the others, with the nicest cover and fanciest font.

There are still considerable benefits to being a sightholder, including a steady supply of stones and competitive pricing. Even so, most think it’s harder than it used to be.

Industry consultant Ben Janowski doesn’t think De Beers is deliberately driving people away, but warns it should turn down the heat if it doesn’t want defections.

“I don’t think they can continue to do things this way,” he says. “I would guess a lot of companies won’t want to go through this every three years where they have this whole process and at the end they may not continue to receive the goods. It just isn’t reasonable. And if they repeat it, they are going to end up losing a lot of prospects that really should be there.”