Sunday, August 19, 2007

New Criteria for "Swiss Made" Label

The Federation of the Swiss Watch Industry (FH) has recently voted by handsome majority for strengthening criteria for the 'Swiss Made' label. According to the secret ballot, there were 52 votes 'for' and 8 'against' reinforcing of the federal law on the 'Swiss Made' label featured by watches.

The brand name is one of the major factors implying the product's quality and prestige in watchmaking, while the 'Swiss Made' label holds the second position by its importance. It is used as a valuable distinction that should not disillusion the customers. 'Swiss Made' indicates the watch's origin and serves as the customer's guidance when he is making his choice.

At the moment, 'Swiss Made' is basically relevant only to watch movements whereas customers acquire a finished timepiece. In fact, in 1992 the watch industry witnessed two amendments to the law specifying that the casing-up and final inspection must be carried out in Switzerland, but it almost did not change the situation.

The reinforcement of the Swiss Made label is expected to cause supply problems. It will require several years and suppliers, the same as watch brands, will have to adapt to the new criteria. The leading watch companies, with their weight within the Federation of the Swiss Watch Industry equal to their presence in the watchmaking market, had already supported the idea of stricter criteria.

The provisions voted by the assembly are relevant to both the timekeeping mechanism and the finished watch. The new project has suggested a value criterion for finished watches. So, what are the basic rules for the Swiss-Made mechanical watches to be worth featuring the 'Swiss made' label, according to the new ordinance? Consider the following:
1) the Swiss-Made mechanical watch must have at least 80 percent of its production cost relevant to operations conducted in Switzerland. For electronic watches, the rate makes up 60 percent.
2) the watch's technical construction and prototype development must be fulfilled in Switzerland. Production cost does not include raw materials, gems and batteries.
3) under the old ordinance, 50 percent of the movement's value must be relevant to Swiss-made parts. For the mechanical movements, the FH proposed to increase this proportion to a minimum of 80 percent, and to 60 percent for electronic movements.

Prior to the assembly, the International Watch Museum in La Chaux-de-Fonds held a special meeting devoted to the issue. One of the specialists present at the meeting mentioned that it is difficult for customers to tell the difference between Swiss, Made in Switzerland, Swiss Made, and Swiss manufacturers as there was a drift in the terms' usage. For customers, 'Swiss Made' generally implies water-resistance, service and repair provided for a certain period of time. The majority of customers do not know how precisely to determine how much of their timepiece's value is of the Swiss origin.

Another participant of the meeting stressed that there should not be any doubts whether the Swiss production is able to meet the higher demands after reinforcing of Swiss-Made criteria. The industry will make new investments just as some companies that have already done it.

The FH is ready to present its proposals to the federal authorities. It will be followed by negotiations with the European Union. At present time representatives of the watchmaking industry interested in the issue hope that Swiss Made will finally reflect quality worthy of the Swiss name.


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