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(photo credit: Courtesy Photo)
Diamond giant Lev Leviev has spoken out in a fierce attack against De Beers, without actually naming the company, but still blaming the diamond syndicate for the erosion of profits in the industry, while calling the group's pricing policy "bold."
"Unfortunately, the diamond industry is undergoing a difficult time," Leviev, the Israeli diamond tycoon and businessman, said at the 32nd World Diamond Congress on Wednesday. "I don't understand why ... are raising the prices of rough diamonds above the listing price and why they are stubborn to lower prices when the market is down."
Leviev added that the syndicate expects diamond manufacturers to pay them four days before they even get their stock in an industry in which 90 days credit policy is the norm. Further, he said, it has the "bold" demand that diamond manufacturers to commit to buying stock three years in advance at an agreed price.
"I don't know any manufacturer who makes money from standard manufacturing," Leviev said. "One solution would be if rough diamond producers would divide profits with manufacturers so they don't keep all the profit to themselves."
Leviev has profoundly shaken the tradition-bound diamond business. Until recently, De Beers had a virtual chokehold on world supplies, controlling about 80 percent of all diamonds produced globally, determining who could buy uncut stones - and at what quantities and quality - and where the cutting centers were allowed to prosper. Leviev, however, pulled an end run around the cartel, dealing directly with diamond-producing governments and shattering De Beers' all-important relationship with siteholders (exclusive buyers of rough diamonds).
"Leviev has entered the market offering better prices and credit conditions compared to De Beers, causing this mess and now he is complaining as the market is in a downturn," one industry source told The Jerusalem Post.
Leviev explained that the diamond industry was facing a number of challenges such as the increase in synthetic diamonds, which posed a threat to the industry and the need for more transparency in the face of money laundering and blood diamonds.
"We need to show how transparent we are," he said.