On 8 July 2013 the Swiss Federal Competition Commission handed down a decision altering their previous agreement with the Swatch Group allowing the Group to cut watch movement and component supplies to non-Swatch Group companies.
Whilst the Commission agrees in principle that Swatch Group can reduce its supplies and will renegotiate the preliminary agreement, it believes that it is too early for the originally discussed levels of reduction of component delivery, and wishes to adopt a ‘wait and see’ approach for a few years to assess the supply situation.
They concluded that there are currently too few sourcing alternatives to be happy about the originally proposed reduction timetable. This decision does not affect the reduction of complete movements, only of components.
Because of its dominant position the Swatch Group is not allowed to unilaterally cut supplies to other watchmakers under the Swiss Cartel Act. It had won provisional backing in 2011 to start cutting deliveries to competitors, forcing some of them to find alternate suppliers or invest in their own production capabilities.
The Swatch Group will be able to reduce shipments by another 10 per cent in 2014, i.e. to 75 per cent of 2010 levels. The competition commission will renegotiate the agreement with the Swatch Group that would have resulted in the cessation of all movement and components by 2021 and 2025 respectively.