INDUSTRY DEBATE
THE WATCH INDUSTRY IS SPLIT OVER THE SWATCH GROUP’S PLAN TO CUT OFF THE SUPPLY OF ITS MOVEMENTS TO OTHER MANUFACTURERS. WILL IT CRUSH OR INSPIRE
OTHER WATCH BRANDS? LEADING WATCH WRITER ROBIN SWITHINBANK HEARS ALL SIDES OF THE ARGUMENTS
changing face
T
o the outsider, all seems impossibly well in the world of luxury watches – business is booming, the products are the best they’ve ever been, and everyone’s in it
together. Reading about the industry can be like reading an insipid Christmas family newsletter. Which is why the long-standing, emotionally charged legal battle over the supply of ETA movements is so fascinating. Last year, Switzerland’s competition commission ruled that Swatch Group, ETA’s parent company, could cut back supply of movements to companies outside its portfolio of brands to 85 per cent of 2010 levels, starting on January 1 this year. The ruling also allowed Swatch to reduce supply of parts to other specialist movement manufacturers, like Sellita, by 30 per cent. However you look at it, it’s a significant ruling, but broadly speaking, there are three responses to it. First, you have that of Swatch Group, which feels vindicated after years arguing that it has the right to reduce and ultimately stop supplying its competitors with movements. Then there is the view shared by a number of brands dependent on ETA that the ruling will either stunt their growth, or put them out of business all together. The third approach is that of acceptance, benign or otherwise. ETA produces more than half of Switzerland’s movements (no official figures are
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released, but it’s thought the figure is around 2.5 million) and its sister company Nivarox is the industry’s chief supplier of watch movement components, including vital parts like hairsprings. In a number of guises, ETA has existed since 1793. Over time, it’s absorbed other movement manufacturers, including some of those that fell on hard times during the famous Quartz Crisis of the 1970s and 1980s – Valjoux and Lemania being the most notable.
As well as making movements for Swatch Group brands, ETA supplies both independent watch companies and brands owned by rival
Orderline 0844 875 1515 The oftime
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