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Swatch Group will be free to supply mechanical watch movements to whomever it wants even though it still has a dominant market position for these essential watch parts, Swiss competition watchdog WEKO said on Wednesday.
The decision puts an end to a year-long procedure pitting the world’s biggest watchmaker against its main competitor in mechanical watch movements, Sellita, with the competition authority seeking to ensure fair competition.
WEKO said in a statement that alternative suppliers for mechanical watch movements — the tiny mechanisms that make timepieces tick without a battery — had emerged since 2013, but Swatch Group’s movement unit ETA remained dominant due to its production capacity and was not allowed to abuse this position.
Swatch Group and Sellita could not immediately be reached for comment.
WEKO in December de facto barred Swatch Group’s movement deliveries from Jan. 1, saying it needed more time to determine whether Swatch could be freed of delivery obligations.
Under a deal struck in 2013, Swatch Group’s ETA unit had to phase out movement deliveries due to its strong market position, but would have been free to supply parts to whomever it wanted from 2020.
WEKO has now decided to grant Swatch Group this freedom with a few months delay despite concerns that Swatch could use it to win back customers from alternative suppliers.
This risk may well have increased during the COVID-19 crisis as collapsing watch demand led to production overcapacity across the industry.
Kepler Cheuvreux analyst Jon Cox said the market liberalisation was good news for Swatch as it would let it improve capacity utilisation and profitability by selling movements to third parties or using them for its own brands depending on demand.
Swatch shares were indicated 2% higher JBPRE01.
Swatch Group on Tuesday posted a 46% decline in sales and its first ever net loss for the first half of 2020.
Reporting by Silke Koltrowitz; Editing by Michael Shields and Louise Heavens
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Swatch Group will be free to supply mechanical watch movements to whomever it wants even though it still has a dominant market position for these essential watch parts, Swiss competition watchdog WEKO said on Wednesday.
The decision puts an end to a year-long procedure pitting the world’s biggest watchmaker against its main competitor in mechanical watch movements, Sellita, with the competition authority seeking to ensure fair competition. […][/vc_column_text][vc_cta h2=”This article is for subscribers only.” h2_font_container=”font_size:16″ h2_use_theme_fonts=”yes” h4=”Subscribe now!” h4_font_container=”font_size:32|line_height:bas” h4_use_theme_fonts=”yes” txt_align=”center” color=”black” add_button=”right” btn_title=”I SUBSCRIBE!” btn_color=”danger” btn_size=”lg” btn_align=”center” use_custom_fonts_h2=”true” use_custom_fonts_h4=”true” btn_button_block=”true” btn_custom_onclick=”true” btn_link=”url:https%3A%2F%2Fluxus-plus.com%2Fen%2Fabonnements-et-newsletter-2-2%2F|||”]Unlimited access to all the articles and live a new reading experience, preview contents, exclusive newsletters…
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Swatch Group will be free to supply mechanical watch movements to whomever it wants even though it still has a dominant market position for these essential watch parts, Swiss competition watchdog WEKO said on Wednesday.
The decision puts an end to a year-long procedure pitting the world’s biggest watchmaker against its main competitor in mechanical watch movements, Sellita, with the competition authority seeking to ensure fair competition. […][/vc_column_text][vc_cta h2=”This article is for subscribers only.” h2_font_container=”font_size:16″ h2_use_theme_fonts=”yes” h4=”Subscribe now!” h4_font_container=”font_size:32|line_height:bas” h4_use_theme_fonts=”yes” txt_align=”center” color=”black” add_button=”right” btn_title=”I SUBSCRIBE!” btn_color=”danger” btn_size=”lg” btn_align=”center” use_custom_fonts_h2=”true” use_custom_fonts_h4=”true” btn_button_block=”true” btn_custom_onclick=”true” btn_link=”url:https%3A%2F%2Fluxus-plus.com%2Fen%2Fabonnements-et-newsletter-2-2%2F|||”]Unlimited access to all the articles and live a new reading experience, preview contents, exclusive newsletters…
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