‘Swiss Made’ or Not?

BASEL, Switzerland—The move to strengthen requirements for a “Swiss Made” label on watches has run into opposition from some Swiss watchmakers.

The Federation of the Swiss Watch Industry wants tougher criteria to put “Swiss Made” on watches and will offer a proposal for its members to vote on during the FH general meeting, June 28 in Biel. If approved, it will be sent to Switzerland’s Federal Council for approval.

How and when “Swiss Made” can be used for watches is covered by a 1971 ordinance of the Swiss Federal Council. However, it’s long been criticized in the Swiss watch industry for being lax, because many watches now stamped “Swiss Made” use foreign-made components, though the watches are assembled in Switzerland.

To preserve the value of “Swiss Made” on world markets and protect confidence in the label, the FH and its board concluded that “stricter criteria of origin” is needed to qualify as “Swiss Made,” said Jean-Daniel Pasche, FH president.

The proposal says a mechanical watch should have at least 80 percent of its production costs and 80 percent of the value of its components done in Switzerland and 60 percent for quartz watches and its movements. Technical construction and prototype development in Switzerland would also be a requirement.

However, Ronald Bernheim, president of Swiss watch brand Mondaine, objects to the proposal.

He told JCK during BaselWorld that a number of companies—at least 12, including some well-known names—”don’t agree with this project” and want “lively discussion” about it before being put to a vote.

Mondaine contends the proposal is being pushed by some of the largest luxury watch brands and producers and calls it “the law of the luxury brands.” (An article in the Neue Zuricher Zeitung said the Richemont Group, Swatch Group, and Rolex are major supporters of this proposal.)

Mondaine contended the proposal, if adopted, would boost the cost of watchmaking for many firms, including smaller ones, which now buy their components outside Switzerland, by five to 10 times. He said it could force some companies to shut down.

Bernheim publicly voiced his objections during the pre-BaselWorld press conference attended by hundreds of journalists from around the world.

Pasche agreed that “there is no unity on such an important subject,” but he strongly denied to JCK that the proposal favors or is promoted by a small group of luxury watchmakers.

“This law has been criticized by many watchmakers for many years,” he said. “Many feel it must be strengthened and adapted to the current situation.”