|MARKETING PRINCIPLES. CURRENT LEGISLATION|
|Participants of diamond and jewelry market :|
There are three types of countries in the world diamond market: diamond suppliers, diamond cutters, and purchasers of diamond jewelry.
The one-channel diamond sale through the Central Selling Organization of the De Beers company enables control over about 60% of diamond stock and distribution of diamonds among approximately 160 agents (siteholders). The policy of the De Beers company is stabilization and slow growth of the world prices for jewelry diamonds. Further distribution of diamonds goes on at 26 diamond exchange markets or at extra-exchange market. The main diamond fashioning centers are specialized in specific stock types and, therefore, specific types of brilliants:
Fashioned diamonds are sold through exchange markets or wholesale dealers, which are also specialized in specific kinds of stones. The major part of the diamonds are sold to jewelry firms, which mount some of the stones and sell the rest after certification to final consumers as investment diamonds or jewelry stock. Special advertisement and marketing programs stimulate demand and provide favorable conditions for the market participants.
|Russian diamond market|
Until recently, the Russian Gohran (State Storage), ALROSA, and YaPTA (Yakutia) have been sources of diamond for Russian cutting firms. Current normative documents permit importing diamonds. The Kristall production association (Smolensk) is one of the De Beers siteholders.
IIn Russia, about 150 enterprizes have license for diamond cutting, however only 40-50 of them really work. Three Kristall enterprizes (Smolensk, Moscow, and Barnaul), which belonged to the Soviet system of diamond plants, remain working to date. There are also several large joint ventures with shares of Israel and Belgium. Most of the diamond fashioned in Russia (about 95%) are intended for export. The diamond are exported through the Almazyuvelireksport state enterprize and other organizations having export license. In the internal Russian market, cutting enterprizes mainly purchase small diamonds, which are in high demand when mounted. The wholesale and retail trade also deals with imported jewelry, which usually include diamonds fashioned in India or Israel. When the retail prices for jewelry with small diamonds are determined in jewelry stores, cut, color, and clarity are often not regarded as important factors, and the appraisal is primarily based on the diamond weight. The total price of jewelry includes the stone price, metal price, work expenses, taxes, excise-duties, amortization, and profits of the market participants. Therefore, the diamond price in the retail market can significantly exceed that established by the price list. The price of small diamonds is usually raised by a factor of 2-3, medium-sized - 1.5-2, and large - 1.3-1.7. Very big costly diamonds may have the same price, whether they are mounted or not, and commonly play the role of investment diamonds.
Natural persons can also deal with certified diamonds, purchasing them in jewelry stores or banks.
The fulfillment of the rules of registration, storage, transportation, circulation, and usage of diamonds and jewelry is controlled by special test inspections.