DE BEERS

Presented By:-
Manpreet Kaur
Sumiter Chawra
Priya Kumari
Avinash Kumar
Sayani
INTRODUCTION
• De Beers Family of Companies are in the diamond, diamond mining,
diamond trading and industrial diamond manufacturing sectors.
• It is by far the largest company in all these categories.
• De Beers is active in every category of industrial diamond mining:
open-pit, underground, large-scale alluvial, coastal and deep sea.
• Mining takes place in Botswana, Namibia, South-Africa and Canada.
 OVERVIEW
• Historically owned 85% share of the diamond market.
• Owns both mines and main distribution system, Central Selling Organisation
• Known for influencing supply and demand to control prices.
• Diamond market is estimated to be $30 Billion per year.
• Most successful monopoly of modern trade.
DE BEERS IS A TYPICAL EXAMPLE OF
MONOPOLY!!!
• It is almost the sole seller of diamonds.
• Sells a commodity with no close substitutes.
• It restricts output and it responds to change in market demand.
• Cartels are immoral because they overcharge the buying public by
artificially propping up prices.
MONOPOLY
• A market structure characterized by a single seller, selling a unique
product in the market.
• In a monopoly market the seller faces no competition, as he is the
sole seller of the goods with no close substitute.
CHARACTERISTICS
• Single Seller
• Price Discrimination
• Price Maker
• Barriers To The Entry
• Profit Maximiser
END OF MONOPOLY
• Firstly, it convinced independent producers to join its single channel
monopoly,
• When that did not work, it flooded the market with the diamonds
similar to those of producers who refused to join the cartel
• Lastly, it purchased and stockpiled diamonds produced by other
manufacturers in order to control price through supply.
• Finally, it bought diamonds when prices fell considerably, such as
during the great depression.
• However, the De Beers model changed in 2000, due to factors such as
the decision by producers in Russia, Canada and Australia, to distribute
diamonds outside of the De Beers channels, thus effectively ending the
monopoly.
• De Beers’ market share of rough diamonds fell from 90% in 1980s to
33% in 2013,because of more competition.
• The diamond industry of the early 21st century is markedly different
from that of the 20th century, and is complex and constantly evolving
geo-political phenomenon.
• Current major players in the diamond industry are the African producers
Debswana and Namdeb, De Beers, Rio Tinto, BHP Billiton , Lev Leviev,
Harry Winston, and Alrosa.
CONCLUSION
• De Beers one of the most successful monopolies in history.
• Used numerous tactics to successfully control supply and demand.
• Monopoly fell apart when it could no longer stop other entrants.