Diamonds

One of the most interesting parts of the diamond instury is its remarkable concentration when it comes to wholesale avenues. Why? Because it's severely limited to only a few locations such as London, New York, and Tel Aviv, and one company controls most of it: DeBeers Diamonds. They are based in Johannesburg, South Africa and London, England.

The production and distribution of wholesale diamonds is obviously a pretty consolidated industry among a few bigger companies, and then further concentrated in traditional diamond trading centers. For example, Antwerp produces 80% of all rough diamonds, 50% of all cut diamonds and more than 50% of all rough, cut and industrial diamonds. All of that from just one location!

DeBeers was created in 1888 by a British man named Cecil Rhodes. DeBeers owns and/or control most of the world's diamond mines and distribution channels. In total, they are responsible for around 40% of annual diamond output. The drawback to one company having so much force is that they can basically set price controls, and market diamonds directly to consumers, undercutting brokers.

Other than DeBeers, the notable body involved in wholesale diamond production is The World Federation of Diamond Bourses (WFDB). This group acts as the intermediary when it comes to wholesale diamond exchange. The group is comprised of representatives in major cutting centres such as Tel Aviv, Antwerp, Johannesburg and other major players in the wholesale diamond market.