Natural diamonds score key victory over synthetics in the UK
Mbongeni Mguni | Monday April 15, 2024 06:00
The NDC is an industry group comprising the world’s rough diamond producers, which is committed to “inspiring and educating consumers on the values of natural diamonds and the positive global impact of the industry”. Members include De Beers and the Okavango Diamond Company, government’s wholly-owned diamond trading firm.
On Wednesday, executives from the New York-based group said the UK’s Advertising Standards Authority (ASA) had upheld a complaint the Council filed against misleading terminology from four UK retailers.
“ASA upheld the complaint against Skydiamond, for misleading marketing and advertisement of laboratory-grown diamonds,” NDC officials said in a statement.
“The ruling states that Skydiamond cannot use the terms “diamonds”, “diamonds made entirely from the sky” and “Skydiamond” to describe their laboratory-created diamonds in isolation without a clear and prominent qualifier. “ASA also told Skydiamond “not to use the claim 'real diamonds' to describe 'synthetic diamonds’”.
Skydiamonds, in adverts run on various platforms in February last year, had featured the headline “Say hello to the world’s first and only diamond made entirely from the sky”.
Smaller text underneath stated: “We make diamonds using four natural ingredients, the sun, the wind, rain and something we have too much of, atmospheric carbon. In doing so, our technology turns a negative into a positive. Now that we can mine the sky, we never need to mine the earth again.”
The dispute touches on the central dispute between natural producers such as Botswana and the lab-grown manufacturers. Natural producers have long accused synthetics’ manufacturers of intentionally marketing their lab-grown creations as real, thus deceiving consumers and grabbing the market through the rock-bottom prices associated with laboratory manufacturing versus mining.
Retail demand and prices of diamonds sank last year due to a combination of oversupply, the fallout from the continued flow of sanctioned Russian diamonds in the market, a softer than expected rebound in the United States and global economic uncertainties.
In that tight environment, natural producers found their jewellery sitting for longer on shelves while synthetic creations flew off faster and were able to eat into key segments such as bridal jewellery, the traditional preserve of natural jewellery.
While the labs had the option of trimming their production to cope with the lower retail demand, the impact on damp jewellery sales reverberated through the midstream of cutting and polishing firms and onto producers such as De Beers, a pipeline involving more than one million workers across the globe. Indian cutting and polishing firms suspended imports for two months, while De Beers and the Okavango Diamond Company also suspended sales, in an attempt to mop up the oversupply and reinvigorate demand.
While some indicators suggest the industry is slowly moving out the slump this year, global diamond industry veteran, Martin Rapaport, expects demand and revenues for natural diamonds to fall by as much 20% in 2024. Synthetics, he says, could take-over about 40% of the US engagement ring and bridal market.
In its ruling this week, the ASA came down hard on Skydiamond.
“The ads must not appear again in the form complained about,” the regulator said. “We told The Sky Mining Company Ltd t/a Skydiamond not to misleadingly use the terms “diamonds”, “diamonds made entirely from the sky” and “Skydiamond” to describe their synthetic diamonds in isolation without a clear and prominent qualifier, such as “synthetic”, “laboratory-grown” or “laboratory-created”, or another way of clearly and prominently conveying the same meaning to consumers. “We also told them not to use the claim “real diamonds” to describe synthetic diamonds.”
The British regulator noted that Skydiamond’s adverts all included images of clear gemstones and references to diamonds. Consumers would understand the word “diamond” in isolation to mean a mineral consisting of crystallised carbon that was naturally occurring.
“We considered that while some consumers may have been aware that synthetic diamonds could be manufactured or created in a laboratory, many would not,” the regulator said.
ASA also dismissed Skydiamonds’ polls and surveys provided by the firm in response to the NDC complaint.
NDC CEO, David Kellie, told Mmegi that while the ruling was applicable in the United Kingdom, it marked a milestone for the natural diamond industry.
“Whilst the ruling applies to marketing in the UK, it shines a light on the importance of consumer protection across jurisdictions,” he said in response to emailed questions on Wednesday. “Consumers are entitled to know the true nature of the product they are purchasing.”
He added that the ruling presented an opportunity to producers such as Botswana.
“This ASA ruling is one of many positive steps forward that protect consumers and the diamond dream that will benefit the diamond industry as a whole and the treasures of Botswana diamonds,” he said.
Kellie said the Natural Diamond Council remains committed to maintaining consumer trust by protecting against misleading marketing.