ZURICH, Oct 27 (Reuters) - Swatch Group will not be allowed to supply more mechanical watch movements to customers than was set out in a 2013 agreement on phasing out delivieries, Swiss competition authority Weko said on Thursday.
“Changing the supply agreement at this stage would threaten the projects of competitors” of Swatch Group’s ETA watch movement unit, Weko said in a statement, rejecting a request from Swatch to change the rules set out three years ago due to weak global watch demand.
During the watch industry’s boom years, Swatch initiated the phasing-out of deliveries of mechanical watch movements -- the tiny mechanisms that make a watch tick without help of a battery -- to the industry, but has recently backpaddled as weak global watch demand led to an oversupply.
Some of Swatch Group’s rivals which built up their own movement production facilities, have said it would put them in a difficult situation if Swatch was allowed to once again deliver more movements than was agreed in 2013. (Reporting by Silke Koltrowitz)