Put yourself in the shoes of one of your customers, for just a moment. You’ve saved for several weeks or even months to buy yourself or a loved one an expensive watch, locket or ring. You’ve been eyeing up what’s in the windows whenever you pass a jeweller, and probably browsing online to see what you can get for your money.
When you finally turn up at the jewellers to make the purchase, you are totally at the mercy of that jeweller’s scruples, and indeed the supply chain that he deals with. If the ring is a lower grade of gold, you wouldn’t know. If the watch is counterfeit and likely to go kaput within a year, you wouldn’t know. If the diamond – and given the price, this is where it is particularly juicy – isn’t quite what it says on the tin, you wouldn’t know. But you still sign the cheque: jewellers know what they’re talking about, right?
Except, this fundamental notion of trust which underpins the entire industry appears to be under attack from a few tiny corners. We’ve only just, at long last, come out of a sort of recession-induced hibernation in the jewellery industry, with hallmarking volumes rising for the first time in years. Yet all of the momentum that has been gained in the early months of this year stands to be jeopardised by confusion over what constitutes a particular grade of diamond; which grading house’s assessments are the ‘truest’; and indeed, whether diamonds which have been treated in some way are being disclosed as such.
This isn’t just a trade issue which can be dealt with through some quiet meetings at the headquarters of associations. Figures such as Ernie Blom, the president of the World Federation of Diamond Bourses (WFDB) have called for further debate on the subject, and rightly so. If the trust of the public is to remain untarnished (to coin a phrase), then part of that debate should comprise a discussion about what sanctions can be imposed against people who fall foul of the rules.
Any economist will tell you that the price of diamonds is unjustifiable, at least on a theoretical level. It is no secret that if a big find is made in a prospecting diamond mine, output is subsequently rationed to prevent a crash in values. The fact that coffee, oil, and indeed company stock values can fluctuate wildly, and yet with a commodity which happens to be a particular type of precious stone they do not, is all the evidence you need that the market is carefully controlled.
But high prices are not a given. If examples of unscrupulous diamond grading continue to arise and the mainstream media gets the bit between its teeth, it could do hundreds of millions of pounds worth of damage to the jewellery industry as a whole. “If they’re fiddling the rules on diamonds,” Joe Public will speculate, “then what’s to say they’re not doing it with gold and platinum, too?” Sadly, there only needs to be a kernel of truth in a tale about how the jewellery industry stitches up consumers for the media to run and run with it. If the BBC’s Panorama can find enough anonymous criminals to spout some nonsense about how widespread the deception is, then the truth ceases to be important. The seed of doubt is sewn in the minds of the public.
Maintaining that trust is as key to the future of the jewellery industry as the process of actually extracting materials from the ground. Blom and his colleagues elsewhere in the international jewellery trade have an opportunity to arrest this phenomenon – but they will need buy-in from national trade associations who are willing to come down hard on the worst offenders on a country-by-country basis. Only then can the independent jeweller be sure that his interests are being competently protected.