Copycats cream off millions from watch industry

Watch out... there are plenty of copies about Keystone

Counterfeiters are costing Switzerland’s watch industry around SFr800 million ($636.65 million) a year, according to figures released on Friday.

This represents almost eight per cent of the total value of Swiss watchmaking exports, worth SFr10.18 billion in 2003.

The Federation of the Swiss Watch Industry – the branch’s umbrella organisation – has complained in its annual report that the situation has reached a “worrying level”.

“I would not say that the situation is getting worse, but it remains tough, very serious,” federation president Jean-Daniel Pasche told swissinfo.

According to the federation, the principal areas for production of fakes have remained the same over the past few years: Southeast Asia, China and the Mediterranean, notably Turkey, Italy and Spain.

But the distribution channels are now much more widespread. The Benelux countries have traditionally been the hub of activity, but distribution is also taking place in central and eastern Europe, in particular Austria, as well as Britain and the United States.

Watches seized

The federation’s anti-counterfeit department last year analysed 1,187 watches which had been seized or bought in 31 countries. No fewer than 60 Swiss watch brands caught the eye of the counterfeiters – not all of them big-name brands.

And while the sale of Swiss watch fakes predominantly takes place abroad, it is also happening on a major scale inside Switzerland.

One person is arrested every five days at the Swiss border with a consignment of fake watches, said the report.

The weakening importance of Zurich airport as a hub following the collapse of Swissair, means that importers of fake watches are using other routes, for example Luxembourg.

But Zurich remained the main entry point into Switzerland for counterfeit watches, said the federation.

Catalogue of measures

Federation president Pasche told swissinfo that his organisation, in conjunction with some watchmakers, had implemented a number of measures to tackle the problem.

“We try to be active with the appropriate authorities in the countries where the problem occurs. For example, last year we discussed it with the governments in China and Brazil to try to improve [anti-counterfeiting] legislation.”

“We also try to find the fakes and destroy them in order to cause damage to the counterfeiters. We also seek to have them punished by the judicial authorities,” he explained.

Nicolas Hayek of Swatch, chairman of Switzerland’s largest watchmaking group, said in an interview in April that the federation was making great efforts to coordinate anti-counterfeiting activities with watchmakers.

He cited Rolex, Cartier, Rado and Omega as the main targets for counterfeiters.

“Enormous problem”

Organisers of this year’s annual watch and jewellery fair in Basel also emphasised that copies of luxury goods posed an “enormous problem”, with millions of dollars at stake.

“Imitations and forgeries have become a global social phenomenon. In our day and age, virtually everything is pirated,” commented Jacques Duchêne, president of the exhibitors’ committee.

The so-called “Panel” of the fair, which examines complaints about fakes, said that counterfeiting operations were no longer small-time affairs working out of garages.

It warned consumers that they were losing out by buying fakes because the prices paid were “hugely excessive” for what they were getting.

For Jean-Daniel Pasche, there are also other issues to be considered.

“Counterfeiters cause damage to the state because they don’t pay taxes or social security, and they can also cause unemployment to others,” he told swissinfo.

“It also damages watch companies because they have invested a lot in research and marketing, and the counterfeiters take advantage of those investments,” he added.

swissinfo, Robert Brookes

Key facts

The main brands targeted by the counterfeiters, according to Swatch chairman Nicolas Hayek, are Rolex, Cartier, Rado and Omega.
The Swatch group is the world’s largest watchmaking concern, with 17 watch brands and companies. It made a profit of SFr492 million in 2003.

In brief

The Federation of the Swiss Watch Industry estimates that counterfeit timepieces cause losses of SFr800 million

This represents about eight per cent of total Swiss watchmaking exports in 2003 (SFr10.18 billion)

Federation president Jean-Daniel Pasche has described the situation as “very serious”.