Conflict diamonds flick may hit demand
Conflict diamonds flick may hit demand.india Updated: Dec 08, 2006 18:50 IST
Blood Diamond, the Warner Bros. thriller that hits movie theatres on Friday in USA, could spark public concern about illicit "conflict diamonds" and hurt demand during the key holiday shopping season, American analysts said on Monday.
But any financial impact to retailers should be modest and brief, they added.
The film, staring Leonardo DiCaprio, highlights the precious gem's role in Sierra Leone's civil war during the 1990s. So-called conflict diamonds, or blood diamonds, refer to stones mined in war zones and sold illicitly to fund war, insurgencies and human rights abuses. James Hurley, an analyst with research firm Telsey Group, said the movie will likely affect sentiment with its star power and advertising push.
But he doubts people will stop buying diamonds, which would hurt retailers such as Zale Corp., Tiffany & Co. Inc., Blue Nile Inc., and Signet Group Plc, which operates the Kay Jewelers chain, as well as diamond processor De Beers Group, which is 45-percent owned by mining company Anglo American Plc.
"What a diamond means and what it stands for has been ingrained in people's psyches for decades, if not centuries. That's a pretty powerful attachment to ... destroy with just one film," Hurley said.
CL King analyst William Armstrong said the movie would likely alter buying patterns for a small group of shoppers. "But how much that would be ... I'd be very surprised if it was a material amount," Armstrong said, adding that the issue is not new and that large retailers already have strict programs in place to prevent or minimize the possibility that their diamonds have left a bloody trail.
To help prepare for a possible public backlash, the World Diamond Council, a trade group, earlier this year hired a crisis public relations firm to design a campaign stressing the industry's efforts at reducing the number of blood diamonds. The campaign included full-page advertisements in national and international newspapers and an educational Web site, www.diamondfacts.org. High-end retailer Tiffany, which said it tries to assure the responsible mining of all materials used to make its jewelry, said it encourages consumers to ask jewelers how they support efforts to promote responsible mining.
"The film 'Blood Diamond' serves as a horrific reminder of the terrible costs of uncontrolled diamond trading ... and we are hopeful it will contribute to ongoing international efforts to assure history does not repeat itself," Tiffany told Reuters in an e-mailed statement.
Polishing The Trade World Diamond Council earlier this year hired a public relations firm to design a campaign stressing the industry's efforts at reducing the number of blood diamonds In 2002, diamond production companies and most countries agreed on the Kimberley Process Certification Scheme, which is a process designed to prevent blood diamonds from entering the mainstream market
First Published: Dec 08, 2006 18:50 IST