New Swissness Regulation Prompts Shoe Manufacturer to Partially Relocate Production to Italy

Background of the IGE Regulation

Around 40 jobs at the Sennwald site in the Rhine Valley are affected by the decision. The relocation to Italy represents a significant cut for the region, which had previously been regarded as a shoe production location in eastern Switzerland. The company justifies the step with the economic framework conditions that have deteriorated as a result of the new IGE regulation.

The Swiss Trade Association (SGV) commented critically on the new regulation. Representatives of small and medium-sized enterprises (SMEs) have long warned that the tightened requirements for Swissness labeling endanger domestic production. They see the partial relocation that has now taken place as the first concrete evidence of these concerns.

The IGE regulation determines which products may bear the Swiss cross and what share of value creation must actually be generated in Switzerland. The tightening of these requirements was aimed at strengthening the credibility of the Swiss brand. Critics argue, however, that the regulation unnecessarily raises production costs in Switzerland and thereby relocates jobs abroad.

Criticism from the Trade Association

Those affected include not only shoe manufacturers, but also other industries that rely heavily on the Swiss cross label. The discussion about the right level of Swissness requirements has been conducted controversially for years. SGV representatives such as Urs Furrer and Sven Reinecke had repeatedly pointed out the risks for producing SMEs.

The affected voters – that is, the general public and economic actors – are watching the development with concern. Should other companies make similar decisions, the Swissness regulation could achieve the opposite of its original intent: instead of strengthening Swiss production, it would further relocate it abroad.

Impact on the Sennwald Location

From a business management perspective, the relocation is a rational response to the new requirements, the company explained. Value creation in Sennwald can no longer be ensured profitably under the given conditions. The search for a location in Montebelluna, a traditional center of shoe production in Veneto, was the logical consequence.

The reactions from politics and business are correspondingly clear. While supporters of the Swissness regulation insist on protecting the Swiss brand, critics see the partial relocation as proof that the regulation does not work in practice. The discussion is likely to intensify in the coming weeks, especially as other industries could also be affected.

Demands on Policymakers

Overall, the case shows how a regulatory tightening can have unintended consequences. The IGE regulation was supposed to secure value creation domestically, but in this specific case it is leading to a weakening of the Sennwald production site. The coming months will show whether those responsible will make adjustments or stick with the existing regulation.

For the affected employees in Sennwald, the partial relocation means an uncertain future. Although the company emphasizes that this is a partial relocation, it remains unclear how many of the 40 affected jobs can be preserved in the long term. Business associations are therefore calling for a round table with the IGE to review the impact of the regulation.