Swiss Watch Industry Aims at New Export Record

After passing the 12 billion franc mark (about $9.8 billion) in 2005, Swiss watch exports could top 13 billion Swiss francs (about $10.6 billion) this year. Watch counterfeiting, though, remains a major concern, and the Federation of the Swiss Watch Industry FH is acting worldwide to fight it. This in essence was the message of Jean-Daniel Pasche, FH president, in his report to the organization’s June 29 annual general meeting in Lausanne, Switzerland. More than 90 percent of all Swiss watchmakers are FH members.

After setbacks in 2002 and 2003 in the wake of the Sept. 11, 2001, terrorist attacks in the United States, Swiss watch exports are back on track, said the FH report, setting records in 2004 and 2005. “Everything indicates 2006 will keep pace with this trend,” said Pasche. (The first five months of 2006 saw an 11 percent increase to 5.1 billion francs, or $4.1 billion.)

The 13 billion franc threshold should be reached or exceeded this year, he said, barring outside factors such as a sharp drop in the dollar or major geopolitical events.

Pasche noted that watch counterfeiting continues to be the industry’s most serious problem, but FH’s Anti-Counterfeiting Group is combating the problem. Last year it was especially active in Latin America, in concert with local authorities, where four operations in Paraguay, one in Mexico, and one in Brazil took 130,000 fake watches and 250,000 spare parts off the market.

The operation in Mexico in August involved 230 police and shut down warehouses close to the important market of Tepito, Mexico. The Brazilian operation, in São Paulo, resulted in the arrest of 14 Chinese nationals in November. The operations in Paraguay all targeted the town of Ciudad del Este, a free trade zone, which, claims the FH report, is “the hard core of counterfeiting in Latin America.” FH “purposely launched consecutive operations, at regular intervals, in order to exert pressure on traders and the authorities,” said Pasche.

FH has also been active in other regions. Its Hong Kong center, in collaboration with the Selective Trademark Union, has organized the seizure of hundreds of thousands of watch copies in China and Thailand, noted the FH report. It has also supervised the seizure of several thousand fake timepieces in markets in Spain.

In addition, it regularly trains customs officials in how to spot counterfeits and speaks out on counterfeiting in conferences, articles, and radio and TV broadcasts, to alert consumers to “the damaging effects of this criminal activity,” said the FH report.

The meeting also re-elected Pasche to three more years as president, and new members of its 20-member board of directors for the 2006–2009 period.