EU probes watchmakers over parts supply

BRUSSELS/ZURICH Fri Aug 5, 2011 11:16am EDT

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BRUSSELS/ZURICH (Reuters) - European Union antitrust regulators are to investigate an allegation that several luxury watchmakers breached EU rules by refusing to supply spare parts to independent repairers.

The European Commission did not identify the companies but Swatch Group, which owns Breguet, Blancpain, Omega and Longines, confirmed it was a target.

"It concerns almost the entire watch industry. We are confident regarding the outcome of this investigation," Swatch spokeswoman Beatrice Howald said.

A spokesman for Richemont, the other big Swiss watchmaking group which owns Cartier, IWC, Piaget and Jaeger-LeCoultre watch brands, did not comment while no-one at LVMH, owner of Tag Heuer, Zenith and Hublot brands, was available for comment.

The European Commission threw out a complaint on the subject brought by the European Confederation of Watch & Clock Repairers' Associations (CEAHR) three years ago, but CEAHR appealed to the Luxembourg-based General Court, which annulled the commission's decision in December last year.

"The Commission will now further investigate the allegations, in order to take account of the General Court ruling," the EU watchdog said on Friday.

In the complaint, CEAHR said the watchmakers' actions threatened to drive independent repairers out of business as there were no alternative sources for most spare parts.

Unlike the mainstream watch industry which has moved on to self-contained, battery-driven electronics, luxury watchmakers use a clockwork or mechanical movement that involves tiny precision parts and requires the work of an expert to repair them.

The CEAHR complains that owners of expensive watches are increasingly forced to send their timepiece for repair to the manufacturer or through an official agent who, in turn, may charge for work which was not requested or charge very high prices.

"Either the work is carried out under terms over which you have no control or choice, or the watch becomes irreparable," the CEAHR says on its website.

"Free competition no longer exists and the brands have no respect for the confidence you have in your usual qualified watchmaker."

A watch repair boutique in Paris, specialized in luxury timepieces, confirmed it was nearly impossible to get parts from luxury brands.

"Basically, unless you have a personal relationship with a brand, you cannot get any parts," said one of the boutique's repairmen. He added that some of the most difficult brands to get parts from included IWC and Patek Philippe.

(Reporting by Foo Yun Chee, Silke Koltrowitz, Astrid Wendlandt; Editing by Ben Deighton and Andrew Callus)

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