Swatch Group warns of ‘massive’ price hikes

Michelle Graff

Biel/Bienne, Switzerland–Swatch Group issued a statement Thursday warning of “massive” price hikes to come in the wake of the Swiss Competition Commission’s rejection of its proposal for moving non-purchased movements.

Back in 2013, Swatch Group reached what it described as an “amicable settlement” with the Competition Commission (Comco) that allowed it to begin dialing back the volume of finished movements and movement parts that movement maker ETA supplies to third-party customers, companies like Tudor and Sellita. A complete stoppage in supply is set for the end of 2019.

Until then, Swatch Group is obligated to maintain movement production at a certain level despite the fact that many of its customers have drastically reduced the size of their orders, with some major customers not placing any orders for 2017.

Because of this, Swatch Group asked Comco to allow ETA to try to sell the non-purchased movements to all its third-party customers, not just those covered under the 2013 agreement.

Comco rejected this request.

In a statement issued Thursday, the commission said, “The difficult economic environment in which the watch industry is currently located is … not a sufficient reason to modify the scheme adopted in 2013.

Swatch Group called the decision “utterly unrealistic.”

The Swatch Group proposal never intended to deviate from the amicable settlement but rather to supplement it in order to take the abusive customer behavior into account,” the company said.

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Source National Jeweler