Watch brands under threat due to non-Swiss parts

Mondaine_retro.jpg

Number of Swiss-made brands not “Swiss enough” for rival companies.

A number of Swiss-made watch brands including the recognisable railway watches by Mondaine may face a court battle because their timepieces are apparently not Swiss enough, says a report by Bloomberg.

The future of several brands and their workers will come under threat if larger rivals such as Swatch Group succeed in calls for fewer non-Swiss components to be allowed in Swiss-made timepieces.

A number of brands may be affected, including the maker of the offical Swiss railway watches, Mondaine. The company has been producing the watches for 25 years, which despite being made in Switzerland, uses imported dials and cases.

Co-owner of Mondain, Ronnie Bernheim said of the campaign: "This law would be cutting the industry into two.”

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"’The volume business will be killed, except for the big companies. Our foreign competitors are laughing", he added.

Swiss-made watches were the country’s fastest-growing export last year. The industry has rebuilt itself since teetering on the brink of collapse in the 1970s. To keep its lead as other manufacturers shift to countries such as China in search of cheaper labour, the industry is trying to erect higher barriers to entry, which would make Swiss watches a scarcer luxury.

Since 1971, watchmakers have been allowed to use non-Swiss components for less than 50 per cent of the value of the watch’s movement, or motor. The Federation of the Swiss Watch Industry, which includes Swatch Group and its competitor Richemont Group, asked the government in 2007 to add higher requirements on the use of Swiss components in the value of the entire timepiece.

The government proposed that for industrial products, 60 per cent should come from Switzerland. A final decision may be made next year, said Jean-Daniel Pasche, head of the federation.

Luxury watchmaking is one of the few manufacturing industries that has resisted a full shift of production to Asia.

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