swiss made trademark could lose value

Karl-Friederich Scheufele reckons Swiss luxury watches need better protection (Chopard) source: Chopard

A reform of the rules governing the use of the Swiss Made trademark for timepieces is one of the mostly hotly debated issues in the Swiss watchmaking industry.

This content was published on June 6, 2006 - 10:03

swissinfo caught up with Karl-Friederich Scheufele, co-president of watchmaker Chopard, and one of those demanding tougher rules for branding.

Under current legislation, a Swiss watch can be made up from low-cost elements produced in Asia, such as the dial, the bracelet and the hands, and be branded Swiss Made.

This situation is a major concern for the watch industry, leading to demands for tougher rules.

For Scheufele, one solution might be a new trademark that protecting firms that manufacture their watches entirely in Switzerland.

swissinfo: Why do you feel it is necessary to change the rules governing the attribution of the Swiss Made label?

Karl-Friederich Scheufele: If we don't institute changes soon, Swiss Made will not mean anything soon

and will end up being replaced by independent labels, something that has already begun today.

Current rules, based on legislation dating back to 1972, have little to do with today's reality. They are too lax and don't protect companies like mine and most of those operating in the upper-price range who produce all their own components.

swissinfo: Some observers say current legislation favours those who export Swiss know-how to countries that may become Switzerland's competitors one day?

K.-F. S.: I share that opinion. If we make components abroad, it's obvious that we are exporting

production technology and know-how.

At one time or another, this strategy will backfire against the Swiss watchmaking industry.

swissinfo: What do you suggest doing to protect the Swiss Made label?

K.-F. S.: There are two types of watch production in Switzerland.

There are low-cost watches that are really made abroad and just respect the minimum criteria for Swiss Made products. And then there are the luxury watches.

The idea would be to introduce another label to establish a difference between these two types

of watches.

A sort of protected designation of origin like you have for some wines and foodstuffs, that would tell purchasers that a watch was really made in Switzerland.

swissinfo: The Federation of the Swiss Watch Industry has already said it wants to consider a reform of the Swiss Made rules. But not everyone seems to welcome the idea...

K.-F. S.: The main producers are split over this issue because they have different ways of producing their watches.

Their interests diverge massively.

This is why I don't think there will

be a way of getting everyone to agree to changes.

swissinfo: Despite this, business is booming, especially for luxury watches...

K.-F. S.: It's true, we are satisfied with business. We rely on the global economy's health, but if nothing too negative happens to affect the luxury sector, we can remain confident.

However, an upgraded and modernised Swiss Made label would contribute to the further development of luxury brands and help us increase our turnover in the long term.

swissinfo-interview: Marzio Pescia

In brief

The Swiss Made label is based on federal legislation dating back to 1972.

A watch is considered Swiss Made if the assembly work on the movement (the motor of the watch) and on the watch itself is carried out in Switzerland.

It also requires that at least half of the movement's components be manufactured in Switzerland.

Many watchmakers consider that given the globalisation of the economy and the possibilities of producing abroad, the legislation must be revised.

Today, many elements that constitute a Swiss Made watch are actually made in Asia.

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Key facts

Each year, hundreds of cases of abuse of the Swiss Made label are uncovered.
Some of these cases involve Swiss producers.
Swiss Made is considered by watchmakers to be mainly a promotional tool.

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