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Time's up for fakes, Swiss watchmakers warn Add to ...

'Fake watches are for fake people: Buy authentic, buy real." That is the slogan of a campaign by the Swiss watch industry to fight booming demand for counterfeit goods during the global downturn.

Switzerland knows that imitation is the sincerest form of flattery, but it wants to preserve its reputation for quality products, from watches to cheese, by setting strict rules on Swiss content and more rigorously tracking down fakes.

Defending "Swissness" will be an uphill battle beyond Swiss borders and promoting premium products is a risky strategy in a recession, but Switzerland wants to be ready for a rebound.

A search for "Swiss made" on the Internet offers up dozens of websites offering replica watches at knock-down prices but also assurances that the mostly "made in China" fakes can match "made in Switzerland" quality.

"We're able to offer low prices, and you can be certain of the craftsmanship that goes into every watch," boasts one company based in Shenzen, China and offering a Rolex Santos "with correct markings and engravings, replicated to the smallest detail," for $449 instead of $952.

Exports of Swiss watches slumped by 25 per cent in the first five months of this year to 5-billion Swiss francs ($5.05-billion), with 2.5 million fewer watches sold than a year ago.

The Federation of the Swiss Watch Industry estimates that more than 40 million fake Swiss timepieces are made every year, generating profits of around $1-billion.

"People still like brands in an economic crisis but unfortunately if there is not enough money at their disposal, they buy counterfeits," said Yves Bugmann, head of the federation's legal division.

The threat from fake goods has spurred the Swiss government into action to try to protect its precious "Swiss-made" label and the white-on-red Swiss cross logo by setting strict rules on Swiss content and production.

Switzerland's squeaky-clean image has been dented by a global crackdown on its secretive banking industry, particularly its top bank UBS, which has been accused of helping tax dodgers hide their money in offshore accounts.

However, the image of most Swiss products is untarnished. A global study conducted by advertising firm McCann Erickson and the University of St. Gallen in 2008 showed Swiss products are perceived more favourably than those from any other country.

"People are prepared to pay up to 20 per cent more for certain Swiss consumer products and for luxury goods they are prepared to pay even more," said Felix Addor, deputy director general of the Swiss Federal Institute of Intellectual Property.

"But if they pay more and they are disappointed because the product hasn't the expected high quality it hurts the reputation of Switzerland."

Juergen Haeusler, chairman of the brand consultancy

Interbrand for central and eastern Europe, said achievements by prominent Swiss such as tennis ace Roger Federer and prize-winning architects Peter Zumthor and Jacques Herzog have helped the country's image. "People think of Switzerland in terms of quality, precision," he said.

To defend the brand, the government is planning legislation demanding that the Swiss share of production costs must be 60 per cent for industrial goods to be labelled "Swiss."

Experts foresee little lasting damage from attacks on banking secrecy, noting that a Nazi gold scandal in the late 1990s over the emptying of Jewish accounts with Swiss banks did not have a lasting effect on the country's image.

"Country brands are big ships that don't change course quickly," said Addor from the Swiss Federal Institute of Intellectual Property. "A Swiss watch is a high-quality watch. It has nothing to do with whether or not Swiss banks have done something good or bad."

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