Swissness Bill: Two Perspectives

Topics: Switzerland, Swiss Federal Council, Raw material Pages: 10 (3102 words) Published: August 6, 2013
Introduction

Over the years, Swiss products and services enjoy excellent popularity all over the world. Switzerland’s first-ranking performance among twenty-five best country brands in the 2012-13 Country Brand Index has no doubt proved that Swiss brand is a renowned one. To customers, goods designated “made in Switzerland” are associated with exclusivity and tradition, and is a guarantee of impeccably high quality.

In an increasingly competitive business world, the reputation of Swiss products has made it favourable for firms to use Swiss designations to earn extra revenues. Businesses are now using “made in Switzerland” and the “Swiss cross” to indicate the country of origin of their products. This has brought some undesirable consequences, in particular, the misuse and abuse of indications of Swiss designations.

In view of these, the “Swissness bill” was proposed to enhance the Swissness of alleged Swiss products, that is, to manufacture mainly with components in obtained domestically in Switzerland. The legislation has great impacts on business operation and consumers’ interests.

This essay first discusses the reasons for the proposal of the Swissness bill under globalisation. It then further evaluates whether the bill is beneficial from the viewpoints of local producers and consumers respectively.

A brief overview of the Swissness bill

The draft of the Federal Act on the Protection of Trade Marks and Indications of Source provides a more sophisticated regulation on the indication of geographical source of a product, thereby defining how “Swiss” the product should be in order to label it as being Swiss. Under the proposal, at least 50 per cent of the total manufacturing costs must incur in Switzerland for a product to be labelled as Swiss. For industrial goods, at least 60 per cent of the manufacturing costs must incur in Switzerland. Research and development costs may also be included in the said costs. For processed natural products, especially foodstuffs, at least 80 per cent of the weight of the raw materials must come from Switzerland, excluding those materials that cannot be found domestically or that are temporarily unavailable.

Aims of the “Swissness” bill

The three principle aims for proposing the “Swissness” bill are outlined as follows.

(a) Prevent abuse of indications of “made in Switzerland”

The first and perhaps most fundamental aim is to prevent abuse of Swiss designations. The worldwide reputation enjoyed by Swiss brands, which is highly appreciated by customers, is a competitive advantage since it enables Swiss goods to be positioned in higher price category and therefore sold for higher profit. In a study conducted in 2008, it was shown that up to 20 per cent of sales proceeds from typical Swiss consumer goods – and even up to 50 per cent for luxury goods – could be traced back to the use of the phrase of “made in Switzerland”.

In the globalised economy, markets located at different geographical locations are simultaneously opened up for businesses in all countries. The volume of international trade has been increasing drastically from day to day. Consequently, it has attracted companies, both inside and outside the country, to take advantage of the skyrocketing economic value of Swiss goods to promote their business and boost the profit by indicating “Swissness” in their products. According to a survey conducted in 2006, over 50 per cent the respondent companies replied that they use the “Swiss” trademark in co-branding, while 40 per cent of them indicated an intention to use the trademark even more extensively in the coming five years. Furthermore, the increase of trademarks endorsed with “Switzerland” or alike is a tremendous quadruple in ten years, from April 2000 to April 2010.

A product that is labelled “Swiss” doesn’t necessarily represent it is really made in Switzerland. Wrongful uses of Swiss brand, cheap imitations and false declarations of origin, both...
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