Editor’s Note
This article discusses undisclosed discounting practices within the diamond industry. While the core report is based on credible financial news sources, the broader implications for market transparency and consumer trust remain a critical topic for industry observers.
On May 13 (local time), it was revealed by Bloomberg that De Beers, known as a global leader in luxury diamonds, had been secretly selling rough diamonds at undisclosed discounts of 10-20% to a limited number of customers. This unusual move by the world’s largest diamond supplier, coupled with the closure of its lab-grown diamond (LGD) brand ‘Lightbox’ announced last week, is sending significant ripples throughout the jewelry industry.
De Beers typically sells to around 70 registered customers (Sightholders) at its ‘Sights’ held ten times a year in Botswana, on a take-it-or-leave-it basis with non-negotiable prices and specified quantities. However, in recent months, the company has been conducting under-the-table sales to a select group of customers at special prices, 10-20% off the official list price. The objective was clear: to reduce rapidly accumulating inventory.
Within the industry, the view is spreading that De Beers is effectively conducting discount sales without officially lowering prices, and dissatisfaction is erupting over the lack of transparency in its selection criteria.
As part of this inventory reduction effort, De Beers announced last week the closure of its LGD jewelry brand, Lightbox. Launched in 2018, the brand took the position that ‘LGDs are a different category from natural diamonds’ and entered the market with a linear price of $800 per carat. However, in the following years, LGD market prices plummeted, with wholesale prices falling by nearly 90%. This wave of price destruction caused Lightbox to lose its competitive edge, leading to the brand’s closure, effectively staging a clear divide between ‘natural vs. synthetic’.
De Beers CEO Al Cook stated, clearly outlining the company’s future policy to focus on branding and stimulating demand for natural diamonds.
In the background of this series of moves lies the business reconstruction plan by parent company Anglo American. Anglo American is already considering the sale of De Beers, and it is reported that strict instructions have been given to De Beers management to ‘not increase inventory any further and improve profitability.’ The closure of Lightbox is part of this, and the ongoing ‘secret deals’ are also seen as part of inventory reduction and preparation for a sale.
Furthermore, another challenge facing the industry is the strengthening of US import tariffs on diamonds.
Currently, a 10% tariff is imposed on all diamonds entering the US market, and after a 90-day grace period, there is a risk of further additional tariffs. While the US is the world’s largest diamond consumer market, it does not engage in domestic mining and relies on India for 90% of its processing. Industry players are preemptively moving inventory to the US market to avoid tariffs, but it is also pointed out that future price increases could dampen consumer demand.
De Beers’ recent undisclosed discount sales can also be seen as a signal forcing a reconsideration of the supply and price control structure the company has maintained until now. For jewelry brands and retailers, as procurement price imbalances directly impact sales strategies, the questions of ‘which supplier to choose’ and ‘which diamonds to place trust in’ will become increasingly weighty.
De Beers has begun to move to redefine the value of natural diamonds. However, the cost of the ‘opacity’ it is bringing to the industry in the process is by no means small for brand image and building trust across the entire industry.