Deadline For Swiss Watch Supplies Extended By Regulator
15 May 2012 - 4:56PM
Dow Jones News
The Swiss competition authority said Tuesday it is extending
measures which force Swatch Group AG (UHR.VX) to supply components
to other domestic watchmakers by one year.
Swatch, the world's largest watchmaker, must now supply up to
85% of watch movements and 95% of other components at their 2010
levels in 2013 as well as 2012.
The provisional steps were introduced last year after Swatch
asked the authority to launch an investigation which would allow it
to reduce the supply of parts to other watchmakers.
Because Swatch has a dominant market position, supplying up to
80% of to the Swiss watch industry's movements, it cannot
unilaterally halt the supply without infringing the Swiss Cartel
Act.
The authority said on Tuesday the extension into 2013 should
allow companies in the sector more time to plan ahead.
"Normally watch manufacturers give the quantities they want to
order by the end of June, but we will not finish our proceedings by
then," said Patrik Ducrey, assistant director at the competition
commission.
"This will give them security for next year," said Ducrey, who
added that the investigation was still due to be completed in the
second half of the 2012.
Swatch, whose brands include Omega, Tissot and Longines,
supplies movements and other parts to rivals in Switzerland through
its manufacturing operations.
Compagnie Financiere Richemont SA (CFR.VX), which makes watches
under the Piaget, Cartier and IWC brands, also receives many of its
components from Swatch.
-By John Revill, Dow Jones Newswires; +41 43 443 8042 ;
john.revill@dowjones.com
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