Swiss watch industry aims at exports record as it fights counterfeits

After passing the twelve billion franc mark (about $9.8 billion) in 2005, Swiss watch exports could top 13 billion Swiss francs (about $10.6 billion) this year, officials said. Watch counterfeiting, though, remains a major concern and the Federation of Swiss Watch Manufacturers (FH) is acting worldwide to fight it.

This in essence was the message of Jean-Daniel Pasche, FH president, in his report during the group’s June 29 annual general meeting in Lausanne, Switzerland. The FH is comprised of more than 90 percent of all Swiss watchmakers.

After setbacks in 2002 and 2003 in the wake of the Sept. 11, 2001 terrorists attacks in the United States, Swiss watch exports are “back on the rails of growth,” 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 $4.1 billion).

The 13 billion franc threshold should be reached or even exceeded, this year, he said—unless “extraneous factors” affect that, such as a sharp fall in the dollar or “major geopolitical events.”

However, noted Pasche, “this highly enviable economic situation” doesn’t erase the industry’s most serious problem—watch counterfeiting. One way the FH is combating this, he noted, is through the actions of its Anti-Counterfeiting Group (ACG). 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 one in the “25 De Março” shopping centre in Sao Paolo, Brazil, in November resulted in the arrest of 14 Chinese nationals. 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.” The FH “purposely launched consecutive operations, at regular intervals, in order to exert pressure on traders and the authorities,” said Pasche.

The FH was 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, (specifically, in Madrid, Valence, La Palmas and Tenerife).

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

In other business during the meeting, Pasche was re-elected to serve to another three years as president.

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