Swiss products enjoy a high level of respect and popularity – so much so that many manufacturers worry about cheap imitations and false declarations of origin.
Yet defining terms like “Swiss” and “Made in Switzerland” is proving to be a difficult task. On October 15, the House of Representatives committee for legal affairs announced that it would need more time to address the issue.
It has decided to create a subcommittee to delve deeper into the 144-page dispatch handed down from the cabinet last November. The document contains proposed revisions to the laws on trademark protection and the use of the Swiss cross for commercial purposes.
“The committee is in favour of stronger protection for ‘Brand Switzerland’ … but finds that the regulations need enough flexibility to ensure that no conditions are introduced that would make it impossible or much more difficult for certain industries to avail themselves of the Swiss label,” stated the committee in a press release.
Of the proposed provisions, the vast majority are not under dispute according to Felix Addor, deputy director of the Swiss Federal Institute of Intellectual Property (IGE).
“What is controversial, however, are the articles that are related to the key question, which is: what should be the exact criteria to define Swissness?” Addor told swissinfo.ch.
Today, the legal conditions for using the “Switzerland” designation are vague. Under the proposed rules, there would be new and different requirements depending on the industry. (See box.)
“Companies which produce globally but sell locally see problems with the draft law. On the one hand they want to produce abroad economically, yet they want to sell their product under the Swiss label as they can get more for it,” Addor said.
He pointed out that in some fields, such as watches or cosmetics, a Swiss cross on the package can automatically add about 20 per cent to the perceived value of the product.
Food for thought
As the legal affairs committee found, the proposed requirements could place a particular burden on the Swiss food industry. This call is good news for FIAL, the Swiss food industry’s umbrella group.
“FIAL welcomes the decision of the legal affairs committee to have a subcommittee revise the Swissness draft. This affords the chance to find a solution that makes macroeconomic sense,” wrote FIAL in a statement on its website last week.
As FIAL president Rolf Schweiger told swissinfo.ch in March, “We have a lot of products in Switzerland which need raw materials from foreign countries for their good quality.” He cited Ovalmaltine as an example of a product that could not possibly be made with 80 per cent raw materials from Switzerland.
However, the draft regulations provide exceptions that would allow producers to exclude materials not found in Switzerland, such as cocoa.
While consumers generally expect Swiss milk in a Swiss-made pineapple yoghurt, few would think that the pineapple was from Switzerland, too.
“Some industries would greatly profit from the newly-proposed law – in particular the watch industry, but also the chocolate, textile and cosmetic industries,” Addor said.
The Federation of the Swiss Watch Industry (FH) supports the Swissness legislation.
“This draft is very important for the watch industry and we support it because it is key to defending the Swiss quality label in the long term,” FH president Jean-Daniel Pasche told swissinfo.ch.
Yet the FH is aware that it is controversial, and that some sectors are not very happy with the proposals.
“We’re not opposed to changes that might help them,” Pasche said, adding that the FH would also welcome a special decree for the Swiss watch industry.
Addor summed it up like this: “Everybody agrees that Swissness is valuable for branding, but without clear and strict rules, there’s a risk of it being watered down. The devil is in the details.”
Copycats and wannabes
Right now, it is quite easy for foreign businesses to claim that their products are Swiss or to decorate their packaging with the Swiss flag to imply a high level of quality.
There is little the IGE can do about it except for sending a polite letter asking the company in question to stop.
“There is hardly any legal possibility to sue a company abroad, but with the new law this could be done by the producer federations,” Addor said. Nevertheless, the IGE intervened in 90 cases in 2010. About two thirds of the firms complied.
Addor said that the institute chooses its cases carefully, focusing on ones involving Swiss crosses.
“We are successful with flag issues because flags are protected under the Paris Convention (an international UN agreement), but not successful when a company writes ‘Switzerland’”, he said.
In any event, it would take years to deal with all the first aid signs and kits scattered around the world. Many of them feature a white cross on a red background.
According to Swiss jurisprudence, at least 50 per cent of total manufacturing costs must be incurred in Switzerland for a product to be labelled as Swiss. Under the proposed rules, there would be new and different requirements depending on the industry.
For industrial goods, at least 60 per cent of the manufacturing costs must arise in Switzerland, but research and development costs may also be included in the calculation.
For processed natural products – in particular foodstuffs – at least 80 per cent of the weight of the raw materials must come from Switzerland. The draft regulations provide exceptions that would allow producers to exclude materials not found in Switzerland, such as cocoa.
What is Swissness?
For both Swiss and foreign consumers, "Swissness" brings to mind "a healthy, well-ordered, efficient world", according to a 2006 government report.
It also has connotations of "precision, meticulousness, reliability and thoroughness".
"Swissness" is also a synonym for innovation, exclusive products and excellent services. It refers to a country that is "rich in various cultures, cosmopolitan and open to the world".
In short, it is a term that is positive and can be used to promote business. Half of companies distributing Swiss products say add the "Swiss" label to their own brand.
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