BC-AC? No, it’s is not the name of a band. That’s AC-DC. BC-AC is a term we’re going to hear a lot more in the coming weeks, months, and maybe years. I first came across it on March 20, in an article in the New York Times, written by the renowned journalist and columnist Thomas Friedman. “There is the world B.C. – Before Corona – and the world A.C. – After Corona. We have not even begun to fully grasp what the A.C. world will look like.”
For the diamond, gem and jewelry industry these are dramatic times, too. Our entire trade, from top to bottom, from miners to retailers, is in lock-down mode. The realization is sinking in that business will never be quite the same, and that some companies may not survive—After Corona. The entire diamond pipeline, from upstream, to midstream, to downstream (the retail and consumer markets) will be forever changed.
Last week, the severe economic downturn caused by the pandemic, spurred the Rapaport Group to downgrade polished diamond prices on the March 19 list about seven percent, across the board. The “trade” – understandably appalled at Rapaport’s actions –came together in what a young diamantaire described to me as a “popular rebellion.”
“We’re going to put an end to this,” the young, cocky, somewhat arrogant diamantaire said. Nearly 750 companies have withdrawn their stocks from Rapnet.”
Following the uprising, the World Federation of Diamond Bourses (WFDB) announced it would create its own diamond trading platform. Meanwhile, it advised using the Israel Diamond Institute’s resource, “Get Diamonds.” While the WFDB’s initiative is laudable, I don’t expect it will happen. During the past decade, the WFDB’s leadership has failed to make any substantial contribution to the international diamond trade. Also, it seems improper to offer a trading platform that belongs to a specific diamond trading hub, in this case, Israel.
By contrast, Ronnie VanderLinden, President of the International Diamond Manufacturers Association (IDMA), in a recent message called on the industry to find a “third-party, non-partisan, viable” platform to offer the trade’s diamonds on.
But to put an end to the industry’s dependence on the Rapaport price list, as the young diamantaire bragged, the industry would have to take quick and robust action—something the industry is not known for doing.
But there is hope. Once before, when its back was against the wall, the industry proved it could be nimble. At the beginning of the century, at a time when the whole world was bearing down on the diamond industry, demanding it take action against conflict diamonds, the World Diamond Council was created. Remarkably, the WDC’s role has not only been pivotal in the creation and development of the Kimberley Process, it also has become central to the protection of the diamond trade’s reputation. Unfortunately, in the past two decades, the WDC is the single feather in the diamond trade’s cap.
With this latest crisis in full swing, is the diamond industry’s back once more against the wall? I would think so.
A crisis, no matter how severe and dramatic, is always an opportunity to make radical changes. The price list “revolution” is an opportunity to make fundamental changes to how the industry operates.
In a conversation with my long-time colleague and friend Jacques Voorhees, founder of Polygon, he said: “”If there were one piece of advice I’d give the industry it would be that it needs to quit using percent back of list as its form of communication for B2B diamond pricing. That cedes too much power to the publisher of the list, arguably creating a situation where the tail sometimes wags the dog.”
So here is the challenge to that Young Turk and his friends who are gleefully talking about those 750 dealers pulling their goods off RapNet.
The time of paying lip service is over.
This is the moment to step up to the plate and implement necessary changes in this industry.
This isn’t just about a price list revolution anymore. The price list revolution should be the catalyst to those fundamental changes needed to shepherd the diamond industry into the A.C. era and secure its survival.
To achieve that goal, we need that generation of younger diamantaires. Our industry’s leadership is in dire need of rejuvenation. The current administration is from B.C. With a few exceptions, it is a group of old men who should clear the decks and make way for a younger, creative generation of diamantaires to take the helm of the industry’s leading organizations. Of course, steering the diamond industry into the third decade of this century will be a humongous task.
Fortunately, a cadre of new leaders is in the making. Rami Baron, President of the Diamond Dealers Club of Australia, has formed the Young Diamantaires Group world-wide with a number of chapters in place, which operates under the auspices of the WFDB. This group of savvy, enthusiastic entrepreneurs keeps growing, meeting at anchor events world-wide, and communicates—no surprise—on Whatsapp.
My advice to the younger generation would be to “copy and paste” the popular uprising to their own centers, bourses, and associations, and become actively involved in directing and turning the industry ship around. Announce your intentions, get on the bridge, make the effort, and you’ll be surprised how welcome your talents, input, efforts, and contributions will be in setting this industry on a new course.