Bloomberg News

Swiss Competition Body Prolongs Measures on Swatch Movements

May 15, 2012

The Swiss competition authority extended by a year provisional measures allowing Swatch Group AG (UHR) to reduce supplies of watch parts to third parties, giving it more time to complete an investigation into the matter.

The temporary measures will remain in force through 2013, the competition body, known as Comco, said today in an e-mailed statement. The regulator said it won’t complete its investigation before the middle of 2012, and acknowledged that watch companies need to order parts several months in advance.

Swatch won provisional backing last year from the regulator to cut deliveries to competitors, forcing many companies to find other suppliers or invest in their own capacity. The owner of the Omega brand has been required to supply movements to third parties because of its dominant position. Swatch’s ETA unit is estimated by analysts to make about two-thirds of the mechanical movements used in Swiss watches. Swatch argues some ETA movements being sold to wholesalers end up in fake watches.

Under the provisional measures, ETA can reduce deliveries of movements, or the internal mechanism of a timepiece, to watchmakers by 15 percent of 2010 levels and deliveries of components that make up movements by 5 percent.

Swatch rose 1 percent to 388.90 Swiss francs as of 9:18 a.m. in Zurich trading.

To contact the reporter on this story: Dermot Doherty in Geneva at ddoherty9@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net.


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