FH votes to strengthen 'Swiss-made' criteria

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FH votes to strengthen 'Swiss-made' criteria

July 06, 2007

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Biel, Switzerland—The Federation of the Swiss Watch Industry (FH) has voted in favor of pushing the Swiss government to strengthen the requirements that allow watches to be labeled "Swiss made."

FH members, which include more than 90 percent of Swiss watchmakers, approved the measure by a large majority—87 percent—at their general meeting held in Biel on June 28.

New regulations propose that 80 percent of mechanical-watch production costs and 60 percent of electronic-watch production costs must be attributable to operations carried out in the country. Raw materials, precious stones and batteries would not factor into production costs, but prototype development and all technical construction would have to be carried out in Switzerland under the tougher measures.

The move comes in reaction to criticism that the Swiss-made label is being used too loosely. The present guidelines, which were enacted by the FH in 1971, state that 50 percent of the production costs of a Swiss-made watch must come from operations carried out within the borders of Switzerland. This allows companies to cut costs by having part of the work done in other areas of the world, Asia in particular, because of low labor costs. In addition, the FH reviewed the guidelines in response to concerns that the dated policy may not meet current trademark laws.

In a statement, the FH acknowledged these concerns and noted the connection between Swiss made and value in the minds of consumers.

"To protect the reputation and credibility of this label, and to safeguard the trust the public has in it, the FH and its organs concluded that it was necessary to tighten the criteria of origin in respect of Swiss made," the organization said in the statement.

While calling the issue a delicate matter, particularly because of problems concerning the supply of watch components, the FH said it sees no other solution.

It noted there will be a transition period and that it will be up to players in the industry "to use it wisely to ensure compliance with the label once it has been revised."

The FH will now submit its request to federal authorities.

Leading up to the vote, American watch distributors and retailers who spoke to National Jeweler indicated overwhelming support of the proposal, believing it would strengthen the U.S. watch industry.

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