As a diamond industry communications specialist, I read Rapaport – and many other new sources – daily. In the diamond industry and trade itself, Rapaport is no doubt an important news source. “Rapaport’s weekly email is the first thing I read on Friday morning,” a religiously-observant diamond trader told me a while ago. Add to that his multiple, daily consultations of the Rapaport diamond price list, and he most probably reads Rap many more times a day than he opens his prayer book.
Therefore, when Rapaport decides to take a stand – in this case regarding synthetic diamonds – the industry takes notice. In his recent article “Martin Rapaport on De Beers’ Synthetics,” published both in the Rapaport Magazine and online, he takes De Beers to task for dancing “at two weddings at the same time,” arguing that De Beers is directly competing with the natural diamond fashion jewelry business and that it is doing nothing to promote natural diamond fashion jewelry.
He may be right. But is De Beers wrong with that approach? Rapaport admits he doesn’t think so, stating, “they [De Beers] are a corporation with a different perspective and agenda.”
You’d think Rapaport would know. Since long, Rapaport itself has been dancing at multiple weddings, among others, by running a polished diamond trading platform, by serving as a go-between between diamond traders and the GIA; by publishing a polished diamond price list; by holding polished diamond tenders and so forth. For many years, numerous commentators – and not necessarily only his detractors – have pointed out a possible conflict of interest between these business activities.
Looking at the bigger picture, what is currently happening in the diamond business, the developments surrounding synthetic diamonds, is exclusively the making of the diamond trade itself. Indeed, apart from paying lip service, the diamond industry has done very little to stop the mixing of melee diamonds in the – predominantly Indian – diamond manufacturing community. As a result, we now find ourselves in a situation where our glorious diamond industry can no longer guarantee that most of the diamonds it cuts and polishes – smalls and melee – is 100 percent natural.
Really, you may ask? Are you saying that we cannot vouch for the identity of the majority of diamonds cut and polished that enter the market?
Yes, unfortunately, that very well may be the case. Melees are rarely graded and therefore all the recent technological solutions on offer for bulk identification of diamonds are directed at these categories of diamonds. Still, only a fraction of the huge annual polished production will be put through the various scanning devices. Because most companies that cut and polish melees, as well as the jewelry companies that produce low-cost diamond jewelry, making pieces set with many dozens if not hundreds of these diamonds, simply won’t bother and most of them probably don’t care.
Let’s just face it, and also admit it: the reputational damage to the lower end of the diamond supply pipeline has long been done. De Beers knows that and if we’re honest, we know it, too. We also know that the price difference between undocumented natural and synthetic smalls and melee will never be significant enough for anyone to really bother.
What does this mean to the retail business? And what do retailers think about this?
Recently, I had a long telephone conversation with a successful retail jeweler from Munich, Germany, about the credibility of the diamond industry, about what he thought of De Beers move into synthetic diamond jewelry, and what it would mean for his diamond sales and for the promotion of diamonds in his market.
“You know, I really don’t care anymore,” he said with an agitated voice. “Every time I speak to my diamond suppliers, I find they are not interested in helping us sell diamonds. They are not interested in the wellbeing of the downstream business. There is also no effective promotion of diamonds! So, I’ve given up on my expectations from the diamond industry. Once the diamond business will lose a quarter, a third or even half of its clients because we, the retailers, have become fed up and have moved to other products, maybe then the diamond industry will spring into action! But by that time, it will be too late!”
“What are your alternatives, then?” I asked.
“Listen, the consumers don’t care about diamonds!” he replied “It is we, the retailers, who care about them, who tell the consumers the story, and who sell them the diamonds. Once we stop doing that and start selling them moissanite, white sapphire, other colored gemstones or even much cheaper LGDs, they will buy that!” the retailer argued.
In his article, Rapaport wrote: “If the most important thing to you is profit, then go ahead, sell anything to anyone at any price. However, if you and your business have real values that transcend profits, take a pass on synthetics.”
“So suddenly the diamond industry is care-free and Rapaport is preaching to the retailers?” my retail jeweler asked. “Let the diamond industry first get its own house in order. They need to remember that we, the retailers, can and will manage without them, but they will not survive without us!” he warned.