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ACCC interviews Swatch retailers

The corporate watchdog has begun interviewing jewellery retailers over price fixing allegations by Swatch.
Six weeks ago Jeweller reported that the Australian Competition and Consumer Commission (ACCC) had begun an investigation into allegations that Swatch Group Australia has been involved in price fixing.

Although, at the time, a spokesperson for the ACCC, Ms Lin Enright, would neither confirm nor deny that an investigation was underway, jewellery retailers have now confirmed that ACCC investigators had been in contact with them.

One retailer, who asked to remain anonymous, confirmed that they had met with ACCC staff and a number of detailed questions were posed. The person said, “The investigations looks to be very thorough”. 

Another retailer, who also spoke off the record, said that the ACCC had sought meetings and a range of information was being gathered. 

The allegations of price fixing by the leading Swiss watch company first came to attention when Mark Watson, former general manager of Swatch Australia, issued legal proceedings for wrongful dismissal and his Statement of Claim alleged that various Swatch overseas executives complained to him about discounting in Australia.

Specifically, Watson’s claim states that Swatch executives directed and/or required him to make it known to all Swatch stockists at various times between 2005 and June 2008 that Swatch would not supply retailers unless they agreed not to sell watches below their recommended retail prices and/or the Swatch store prices.

The Statement of Claim nominates specific jewellery retailers that were affected by Swatch’s activities. 

When contacted, two other retailers named in Watson’s Statement would not confirm if the ACCC had been in contact. 

It is believed that the ACCC had become aware of price fixing allegations when Watson first issued his wrongful dismissal proceedings in the Victorian County Court. 

After two adjournments, the case is scheduled to begin 19 July. Watson has previously confirmed a lengthy and detailed interview with the ACCC took place in January, which may have lead to the ACCC now interviewing Australian jewellery retailers.

This latest news comes after Jeweller had become aware of an internal staff meeting held at Swatch’s Australian head office. Sources close to the group say that Swatch Australia managing director Megan Parker met with senior staff on Monday April 12 to inform them that the ACCC had formally contacted the company. 

A former Swatch employee subsequently confirmed that they have been contacted by the ACCC to provide a statement. The person explained that when Swiss managers visited Australia, local sales staff were required to call-on retailers and remove any discount price stickers from watches because the Swiss continually asked for photographs of discounting and anything else that was supplied. 

“Those photographs were held at the Swiss head office and we would receive emails with directions about what to do. 

“At the end of the day, we were basically instructed to manipulate the system in order to be able to get rid of the retailers who were discounting and compromising the prestige of the brand,” the former employee continued. 

The latest news also comes after the Swiss watch giant has had its own dealings with the Swiss corporate watchdog, COMCo.

UK industry magazine, Retail Jeweller has reported that the Swatch Group is pushing forward with plans to stop selling watch components to rival companies. It requires formal permission from the Swiss ACCC equivalent – Competition Commission (COMCo). 

The magazine’s report states, “Watch components are available from Swatch across the entire Swiss watch industry, and stopping this could mean the end for watchmakers who don’t have the resources to produce their own. Sourcing parts from outside of Switzerland would undermine the ‘Swiss made’ appeal of many of the industry’s brands.”

More reading:
Fifth story: Swatch in trouble

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Tuesday, 23 October, 2018 10:17pm
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