The move by De Beers into producing and selling synthetic gem diamonds is seen as either a smart move, undercutting its opposition by riding the coattails of natural diamonds, or a decision that will eventually cannibalise its natural diamond business. De Beers, the largest producer of natural diamonds by value, has, along with its peers, fought the battle against diamonds grown in laboratories, arguing the natural stone is more precious, formed in the crucible of the earth and brought to the surface in extremely rare volcanic pipes. Now, instead of fighting the producers of synthetic diamonds on an emotional level, De Beers, an 85% held Anglo American subsidiary, is taking the challenge that poses a long-term risk to its business head on, clearly labelling its diamonds as grown in laboratories and pricing them as such, with a discount of about 75% to diamonds coming from other companies offering man-made diamonds. One analyst warns of De Beers "cannibalising" sales of natural stone...
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