De Beers Diamonds - Early History
Early History of De Beers Diamonds
When one thinks of diamonds, one thinks of DeBeers, founded in 1888, it is now one of the largest diamond companies in the world. Since its inception to today, they have controlled 85% of the rough diamond trade, only losing some foothold to competition in recent decades, but still control 29% of the market. DeBeers was founded in a dangerous time of war, when discovery and excitement succeeded through the daring spirit of the founder with the help of the British government.
The name comes from two Dutch brothers, Diederik Arnoldus DeBeer and Johannes Nicolaas DeBeer, farm owners settlers. They were forced to sell by the British government when a large diamond deposit was found on their farm.
The path to global domination taken by Cecil Rhodes was through shrewd use of business take-overs, mergers, and acquisitions. During the 1869 diamond rush, Cecil went from hiring water pumps, to using the earnings to buy smaller claims to owning the entire diamond production for the country. He did this via a calculated gamble at the time, which financed his operation with a vast loan from the Rothschild Family.
The De Beers Monopoly
In history, very few monopolies’ have existed. They tend to be broken up as fast as they can be formed. They tend to drive the price of the goods much higher whilst they exist for a reason. Often, they are formed by the first company in a region, or if the cost of entering the market is very high. The story of the DeBeers monopoly is very simple. By 1889, Rhodes negotiated a strategic agreement with the London-based Diamond Syndicate, which agreed to purchase a fixed quantity of diamonds at an agreed price, thereby, regulating output and maintaining prices. This supply agreement was large enough to form a lasting monopoly.
Economic Crisis' and De Beers Diamonds
We now see the impact the coronavirus is having on business, as many people are drawing parallels to the wartime economic crisis. Cecil Rhodes', then fledgeling, DeBeers company existed in a time when war was all around. The battle was about British control of the country whether he, a British-born capitalist, would retain ownership of his purchased land. It is part of the legend that he moved to a city at the onset of siege to pressure the British government to defend it. It is also recorded that he turned the business over to help the war effort. Producing shells, an armoured train, a long gun defences. One can imagine the personal pressure he was under, a vast loan to pay success hanging on the outcome of the war!
A Diamond is Forever
Having weathered the storms of war and competition deaths, the DeBeers group turned the massive power of its organisation to marketing. They coined the term “A diamond is forever” in 1947, which had the bigger marketing spend than anyone else in the industry.
Pre-owned Diamond Jewellery at Suttons & Robertsons Jewellers London
Here at S&R London Jewellers, we have a great collection of pre-owned DeBeers diamond jewellery for you to choose from, alongside our selection of pre-owned vintage, luxury and designer jewellery from Vera Wang, Cartier, Gucci, Tiffany, DeBeers, and Boodles.
Discover the original article here: www.suttonsandrobertsons.com/articles/the-early-history-of-de-beers/