Imitation might be the sincerest form of flattery for some, but the Federation of the Swiss Watch Industry (FH) is not taking kindly to the fakes.
Last year, the industry organization, in collaboration with local customs officials, police forces and lawyers, seized around one million counterfeit Swiss watches at the country’s entry points, but also in Asia, Turkey, Latin America, and the Middle East. A recent raid in Dubai netted 30,000 watches and a 300,000-franc ($320,000) fine against the “manufacturers”.
“The piracy system has become a well-oiled and illegal machine with disastrous social and financial costs,” said FH president Jean-Daniel Pasche speaking at last month’s annual symposium on counterfeiting, the Journée Suisse de la Contrefaçon.
The event was held in Renens near Lausanne under the aegis of the Swiss watchmakers’ federation with the collaboration of the pharmaceutical and audio-video industries. The groups aim to sensitize the public to the problem of counterfeiting through a poster campaign and a competition of short films made by young people, who are often the target of counterfeiters.
Replicating industrial goods is nothing new, of course, especially luxury goods. What is new and troublesome is the impact of the internet, which acts as an unrestricted global distribution channel. Innumerable websites offer watches for sale or at auctions, and sorting out the real from the phoney is not always a clear-cut business.
“The consumer used to travel to the product,” says Yves Bugmann, head of FH’s legal department. “Today, the product is delivered to the consumer by clicks, and can be purchased anonymously.”
FH has been pushing back and pulling no punches in the process. The University of Applied Sciences in Biel developed special software to identify websites selling or auctioning brummagem timepieces. The project has resulted in thousands of sites being shut down and the removal of over a million offers over the past five years, Bugmann boasts. He notes, however, that new sites keep popping up.
At street level, the Swiss watch industry organization maintains a global network of investigators who track counterfeiters. It also has a programme to train police forces and customs officers throughout the world to look for fakes, which are often tucked away in toys or other household items for shipping. Asia is the number one source of fake watches, with China, logically, at the top of the list since it has a native watch industry of its own, providing the machines to make components.
The actual cost of counterfeiting is difficult to assess. FH puts the annual figure at 800 million francs in lost sales. But the real value is more ephemeral, says Jean-Daniel Pasche: “Our industry has managed to build a unique, world-wide reputation over four centuries, and we have to maintain customer confidence in the brands and avoid them being emptied of their value.”
Hence the vigorous sensitization campaign to respond to the argument that the counterfeiters are servicing a market segment that would not otherwise buy the original. Yves Bugmann is emphatic: wearing a fake Rolex (the most copied brand) or Omega means supporting shady people.
“Few buyers understand that counterfeiters are often connected to organized crime or even terrorism,” he points out. “The factories are unsupervised and often use child labour as well.”
Consumers also risk losing their investment, he says, because counterfeit watches or other goods purchased abroad or on the internet can be confiscated at the Swiss border, whether it is packaged or on a wrist. The seized item will then be destroyed with no recourse. The cost to the buyer can be very high.
Increasingly, counterfeiters are manufacturing expensive replicas that can hardly be distinguished from the original without actually opening the case and looking inside. It takes an expert eye to see some small differences in the crown, the finishing, or even the writing on the dial.
The brands have been responding in their own way. Their websites advise customers to only buy through official channels, such as boutiques or certified dealers. Most major brands like TAG Heuer, Hublot, Patek Phillippe and the hyper-luxurious Richard Mille have sophisticated systems in place to identify and register owners with the company and the distributor.
By the same token, not everyone in the Swiss industry is worried about the threat. Smaller brands, for instance, tend to fly under the counterfeiters’ radar. For Parmigiani, a high-end brand founded in 1996, the first copies felt like legitimization. They litigated only once, when some quartz-run fakes of the iconic “Bugatti” model showed up at the Baselworld fair.
Even more laconic is Yvan Arpa of Artya, one of the industry’s more scintillating figures. His timepieces feature a case ravaged by an electrical arc and unique dials made of diverse materials, from cut-up 50-euro bills, to bullets and butterfly wings.
“The guy who wants to copy my stuff will have to get up early,” he says, adding provocatively: “Anyway, it’s mostly Swiss brands that have grabbed my ideas.”