Swiss Made watches are now 10% more Swiss

The change in the law is to weed out low-end watchmakers abusing the system. But is it enough? 

Neil Churchill January 5, 2017

Some countries are so well known for producing a certain product that, if you’re a traditionalist, you don’t look anywhere else.

For example, if you want leather shoes you go Italian. Single malt whisky means Scotland. For the best technology you think Japanese. The best cars (supercar exceptions) you see the Germans. And for almost as long as time itself, if you’re after a new watch you go Swiss.

“Swiss Made” is one of the most respected stamps in the luxury market. It guarantees certain qualities that make it easier on your conscience when parting with a large sum of money; accuracy, authenticity, reliability, heritage and tradition to name a few. 

However, Swiss Made has never meant that a watch is wholly made in Switzerland. In short, the stamp used to mean that a watch was at least 50 per cent Swiss. From now on, as of 1st January 2017, it will need to be at least 60 per cent. But the devil is in the detail. 

Since the end of 1971, the use of the phrase “Swiss Made” on watches was covered by a regulation from the Swiss Federal Council. It decreed the following for a watch to be labelled as such:

  • The movement (the mechanism) is Swiss
  • The movement is cased in Switzerland
  • The manufacturer carries out a final inspection in Switzerland

To go into more detail on that first point, the Federal Council had to define what qualified as a Swiss movement. It said:

  • The movement must be assembled in Switzerland
  • The movement must be inspected by the manufacturer in Switzerland
  • At least 50 per cent of the value of the movement’s components must be Swiss

It’s that final point that has ultimately led to the recent change. Now, as of 2017, Swiss Made means the following:

  • At least 60 per cent of the entire production cost of a whole watch must be Swiss
  • At least 50 per cent of the value of the movement’s components must be Swiss (same as before)
  • At least 60 pre cent of the movement’s production must be Swiss
  • The technical development of the watch and movement must be carried out in Switzerland – which recognises smartwatches

Why the change? 

The shift from 50 to 60 per cent has happened because certain brands at the lower end of the market were using clever tactics to meet the old criteria without fully committing to the manufacturing standards, or moral ideals, that have long been associated with the Swiss Made stamp.

The rule that 50 per cent of a movement's value must be Swiss was easy to circumvent. All a manufacturer had to do was buy the most expensive parts (springs, jewels, balance wheel) in Switzerland and then source all the other components (dial, hands, case, strap) from another source that was invariably cheaper. They did it because, as studies have shown, buyers are happy to spend up to 20 per cent more for a ‘Swiss Made’ watch. It was simple economics: lower cost of production, achieve Swiss Made status and consequently raise the price point. From a business perspective at least it’s hard to knock the companies that did it, although it's easy to see why it infuriated some of the more traditional Swiss brands. 

The change in the law aims to stop that happening. But is it enough? It does seem a little baffling that the Federal Council did not change the specific point on the value of a movement’s components. It leaves the industry to assume that the new 60 per cent rules on production costs will be strong enough to deal with the problem.

For luxury Swiss watchmaker H. Moser & Cie. however, that's not enough. In protest, the brand has announced it is removing the Swiss Made mark from all its future watches from 2017 onwards; a bold move for a company that already takes minimalist dials to the extreme. On its Instagram page the company explained its decision: “We deem this reinforcement [60 per cent] to be insufficient and still too lenient: this label will lead to more confusion rather than adding value.

“There is a big gap between end-consumers’ perception of the label, who generally take the Swiss Made designation to mean the item is 100% Swiss, and the reality that brands manufacture many components in other countries. Our own production processes are over 95% Swiss, and we would have welcomed a much stricter standard to qualify as "Swiss Made".” 

To reinforce its position on the subject the company also announced that its next watch, to be unveiled later this month at the SIHH watch fair in Geneva, would be the ‘most Swiss watch ever created’ – produced in Switzerland by Swiss watchmakers with materials of Swiss origin. Which, ironically, is what many buyers of other Swiss Made brands probably assumed they had been purchasing for years. Moser has already revealed it will have a red fumé dial and white indexes in a separated cross style. In other words, it's the Swiss flag.

While the new regulation is now in place, it doesn’t necessarily mean that your local watch dealer is already abiding by it. All watches that were manufactured up until the final day of last year can remain in distribution until the end of 2018, even if they do not qualify as 60 per cent Swiss Made.

What will happen to them after that, who knows? But as of next year you can feel safe again buying Swiss Made. That is if you don’t mind knowing that potentially 40 per cent of your watch is not Swiss at all.