i swear this blog is becoming a de beers advert =]

De Beers

De beers are well known for its monopolistic practices throughout the twentieth century. It used its dominant position in the market to manipulate it.
It used several methods to exercise control over the diamond market. These included:
· Convincing independent producers to join its monopoly franchise
· Using stored diamonds to flood the market whenever they were threatened by other producers
· Purchasing diamonds in large quantities to control prices through supply and gain monopsony

What ended their monopolistic regime?

De beers supply-controlled market was no longer tolerable as producer in Russia Canada and Australia started distributing outside of the de beers channels

Also diamonds fell in demand compared to other luxury goods i.e the change in the behaviour of consumers led to the fall in demand for diamonds.

De beers then changed from a supply-controlled market to a demand controlled market. As a result they are now a lot more profitable with a 40% market share than when they had an 80% of the market share.