Diamonds are Not “Forever”; They were Never Even Rare

Diamonds are not as rare as people believe.  They rank as the most common of the traditional precious stones.  Rubies, sapphires, and emeralds are rarer, especially at high quality, and gem experts have said so for decades.  The price of diamonds was raised by a monopoly, and by an advertising campaign that convinced people this arrangement was tradition.

The Campaign That Invented a Tradition

De Beers controlled 80 to 90 per cent of global diamond supply from 1888 into the late 1990s, the longest-running monopoly of the modern era.  By 1938, the Great Depression had gutted demand.  Diamond sales were collapsing.  De Beers hired N.W. Ayer & Son, an American advertising agency, with one brief: make diamonds essential to love itself.

Ayer did not advertise a product.  It built a social norm from nothing.  Diamonds appeared on the fingers of Hollywood stars.  Lecturers visited American high schools to teach students that a diamond ring belonged in every engagement.  Magazines ran romantic diamond storylines planted by the agency.  In 1947, copywriter Frances Gerety wrote four words that closed the loop: “A Diamond is Forever.”  Advertising Age later named it the greatest advertising slogan of the twentieth century.

The financial result speaks for itself.  Annual US diamond sales sat at US$23 million in 1939.  By 1979, that figure reached US$2.1 billion.

The “Salary Rule” was Never a Tradition

De Beers introduced a benchmark: a man should spend one month’s salary on a ring.  Sales stagnated.  In the 1980s, the benchmark doubled to two months’ salary, a figure with no basis in custom, invented entirely by ad copy.  In Japan, where De Beers ran a parallel campaign from 1968, the local benchmark reached three months’ salary.  Different countries received different numbers, tuned to what each market would bear.  None of it traced back further than an advertising brief.

The slogan also served a second purpose, rarely stated aloud.  “Forever” discouraged resale.  A diamond meant to last a lifetime is a diamond that never re-enters the market to compete with new stock.  De Beers protected its own pricing power by convincing buyers that selling a diamond back was close to sacrilege.

The Collapse Now Under Way

The empire built on that campaign is coming apart.  De Beers reported an underlying EBITDA loss of US$511 million for 2025, against a US$25 million loss the year before.  Parent company Anglo American has written down De Beers’ value by US$6.8 billion across three consecutive years: US$1.6 billion in 2023, US$2.9 billion in 2024, and US$2.3 billion in 2025, cutting its carrying value from over US$4 billion to US$2.3 billion.  Anglo American’s group net loss reached US$3.7 billion for 2025, driven by that impairment.  Anglo American Chief Executive Officer Duncan Graham Wanblad confirmed the company is in advanced talks to sell or spin off De Beers entirely.

The cause is structural, not cyclical.  Laboratory-grown diamonds, chemically and optically identical to mined stones, now account for more than 45 per cent of US engagement ring purchases, up from 5.2 per cent in 2019.  Lab-grown prices fell 74 per cent between 2020 and 2024 as production capacity expanded by over three hundred per cent.  De Beers’ own realised price per carat fell 7 per cent in headline terms in 2025, and 25 per cent once inventory rebalancing is included.  Pandora, one of the world’s largest jewellery brands, dropped natural diamonds from its collection entirely and grew sales after the switch.

An industry built on manufactured scarcity is now watching real scarcity disappear from underneath its own marketing.  A stone that was never rare, sold at a price justified by a slogan written in 1947, is losing to a laboratory-grown version nobody can tell apart with the naked eye, at a fraction of the cost.  The three months’ salary rule was never a tradition worth honouring.  It was an invoice, written by an advertising agency, and the industry that sent it is now the one going broke.

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Terence Nunis | Executive Chairman, Equinox Zenith | Author, The 1% Playbook: The Billionaire Cheat Code