The Swatch Group will start restricting the components it supplies to rivals from next year
Swatch trims watch supplies to rivals
Posted December 13, 2011 | By Aaron Weinman
The Swatch Group plans to cut back sales of watch components to rival watchmakers.
As of January 1 next year, Swatch will cut back – and possibly wrap up – sales of mechanical movements and other watch components to competitors. The move is an attempt to ensure the company has enough supplies for its own brands, and to allow it to concentrate on producing watches with higher profit margins.
However, smaller Swiss watch manufacturers are decrying the decision, which they claim will cause several companies to “disappear”.
As previously reported by Jeweller in June, Swatch enlisted the services of the Swiss Competition Commission to investigate how the group might step back from its role as a movements and components supplier.
Nine rival companies have already challenged its approval of the decision, arguing that without access to Swatch’s locally-manufactured parts, many smaller brands will be unable to keep their “Swiss made” label.
Peter Stas, the co-owner of rival watch brand Frederique Constant told the Economic Times it would have been difficult to start watchmaking 23 years ago without access to Swatch’s production platform.
“A lot of companies will cease to exist while Swatch, the monopoly operator, will simply get stronger,” Stas said.
The largest watchmaker in the world, Swatch reported revenue last financial year of $6.95 billion. The company, which manufactures brands including Longines, Omega, Tissot and Breguet believe rivals should increase their spending on manufacturing, thereby strengthening the quality and competitiveness of the Swiss watch sector. It insists its goal is not to harm competitors.
More reading:
Swatch steps up campaign to cut watch component supply
Swatch ends partnership with Tiffany