C V~\?/* : S^lp a supplement to Internationa/ Commerce 1963 TRADE MISSION REPORT/A U.S. DEPARTMENT OF COMMERCE PUBLICATION A SUPPLEMENT TO International Commerce ... the weekly news magazine for world traders published by the Bureau of International Commerce and sold by the Superintendent of Documents, U.S. Government Printing Office, Washing- ton, D.C. 20402, and by Department of Commerce Field Offices for $16 a year. THE COVER: The Azo Dies building at CIBA Basle is designed for modern vertical manufacturing tech- niques, with the largely automatic flow moving from top to bottom. Report of the 1963 Trade Mission to Switzerland DEPARTMENT OF COMM PUBLICATION U.S. DEPARTMENT OF COMMERCE Luther H. Hodges Secretary Franklin D. Roosevelt, Jr. Under Secretary Jack N. Behrman Assistant Secretary for Domestic and International Business Eugene M. Braderman Director, Bureau of International Commerce For sale by the Superintendent of Documents, Government Printing Office Washington, D.C., 20402 - Price 20 cents Members of U.S. Consumer Goods Mission to Switzerland WALTER BUCHDAHL, Mission Director Assistant to Director Regional Affairs, European Division Office of International Regional Economics Bureau of International Commerce, U.S. Department of Commerce CHARLES LEVY Chairman of the Board S.P. Dunham & Co. Trenton, N. J. MARVIN BARAB Manager, Marketing Research Mattel, Inc. Hawthorne, Calif. CHARLES E. SNELL Consultant, Retail Merchandise Portland, Ore. JOSEPH B. HALL Chairman of the Board The Kroger Co. Cincinnati, Ohio SAMUEL S. WURTZEL President Wards Co. Richmond, Va. JAMES E. MURRIN, Trade Development Officer Senior Plans Officer, Trade Center Division Bureau of International Commerce, U.S. Department of Commerce Reports by individual Mission members are reprinted from the December 2, 1963 issue of INTERNATIONAL COMMERCE. TRADE MISSION APPRAISAL Swiss living standard, expanding domestic economy hold promise for U.S. consumer goods sales Two separate markets to be explored: Wants of selective Swiss-born customer and those of foreign worker with lower earning power, more modest requirements By WALTER BUCHDAHL Switzerland, the country with the high- est standard of living in Western Europe and a per capita gross national product of almost $2,000 as compared to $3,000 in the United States, holds promise for greater sales of U.S. consumer goods if U.S. exporters make determined efforts to capture part of this market. This appraisal, by the Commerce De- partment's Consumer Goods Trade Mis- sion just back from the land of the Alps, is based primarily on two major features in the economic structure of the country: A relatively high standard of living and a rapidly expanding domestic economy. In addition, the presence of about 800,000 foreign workers provide an ac- tive, if limited, market for lower priced goods. U.S. consumer goods exports to Swit- zerland have in the past represented only a minor percentage of total U.S. exports to that country. The majority were in producers' goods, such as machinery and aircraft, and in agricultural commodities such as grains, cotton, and tobacco. Trade Mission efforts were therefore directed mainly toward finding how to expand the comparatively small share of the United States in the domestic market for consumer goods, although frequently other commodities were discussed with interested Swiss firms or agencies and appear to have good prospects. It should be possible in the next 2 or 3 years to boost U.S. exports of consumer goods to Switzerland by 25 to 30% over present levels, provided U.S. exporters re- search that market diligently and sell it vigorously and flexibly along lines indi- cated by individual commodity specialists of the Mission. This estimate presupposes no sudden downturn in the Swiss econ- omy. Two separate markets One of the main findings of the Mis- sion has been that there are actually two somewhat separate markets for consumer goods which should be explored by U.S. exporters. The first is by far the largest and comprises many types of consumer goods required by the conservative, qual- ity-and-price-conscious and extremely se- lective native Swiss customer who, how- ever is becoming less conservative, espe- cially in the selection of wearing apparel. The second is the market presented by foreign workers with lower earning power, whose more modest and less ex- acting requirements are catered to at present only by a surprisingly small num- ber of Swiss retail enterprise. Although this market may not be very large in terms of present sales potential, it will become more important as these con- sumers stay on in Switzerland, settle down to family life, or, if already mar- ried, bring into Switzerland the rest of their families. As the earning capacity of this group expands, the people will nat- urally tend to switch to higher grade and higher-priced consumer goods. U.S. exports directed at these two major markets are welcomed by Swiss business and Government circles, who al- most unanimously state that greater avail- ability of consumer goods will help to mitigate the inflationary pressure on the "overheated economy." In conversation SWISS IMPORTS/ 1963 BY PRINCIPAL COMMODITY GROUPS Mineral fuels, lubricants and related materials Commodities and transactions not classified according to kind 0.30/ Crude materials, inedible, except fuels Animal and vegetable oils and fats 0.5% Beverage and tobacco 2.20/c Miscellaneous manufactured articles Source: Based on Analytical Abstracts, OECD after conversation the desired effect of greater imports on the "Economie Sur- chaufee" was underscored to the Mission. . If, therefore, there was ever a propiti- ous time for attempts to expand and/or penetrate the Swiss market for consumer goods, it is now. Nevertheless, the U.S. exporter should keep in mind that this is a highly com- petitive market. Swiss domestic industry, especially in textiles, ready-to-wear, shoes, leatherwares, household utensils, and also some small, household appliances, is ex- tremely efficient. Furthermore the prox- imity of Switzerland to the European Economic Community (EEC), especially the Federal Republic of Germany, holds a tremendous advantage for aggressive sales campaigns on the part of firms in the EEC. This is even more important inasmuch as Germany traditionally has been the largest supplier of Switzerland in practically every field. Consideration should also be given to developments in the European Free Trade Association (EFTA), to which Switzer- land belongs along with Austria, Den- mark, Norway, Sweden, Portugal, and the United Kingdom. EFTA-produced goods eventually will be admitted to Switzerland free of import duty. In spite of the heavy competition for the Swiss consumer's franc, the demand for and acceptance of U.S. consumer goods is great enough to open up new markets in Switzerland. U.S. manufac- turers and exporters in assessing the sales potentials of that country should also consider that it is visited annually by millions of tourists. Two hundred and fifty interviews re- vealed a wide interest pattern in Ameri- can goods, far exceeding the announced specialization in consumer goods. The interest of Swiss businessmen in such broad categories as chemicals, special machinery, professional and scientific in- struments, and automotive equipment re- flects the country's efforts to increase and rationalize domestic products. In consumer goods, wearing apparel and special apparel fabrics, food, house- wares, appliances, and miscellaneous novelties were the chief items of import interest. The advanced technological de- velopment of Swiss industry was reflected in the licensing opportunities offered and sought in special machinery, precision in- struments, aerosol cosmetics, and house- hold chemicals. The needs of Swiss business were dem- onstrated in inquiries for agencies and distributorships for business machines of many types, including photocopying and dictating equipment; industrial firms sought food processing and packaging equipment; food distributors sought new sources for poultry, seafood, spices, and canned foods. The impression gained by Mission members was that chances for expansion of U.S. exports as highlighted in the fol- lowing articles seem to be best in the field of specific food items and clothing. Camp- ing, hiking, and skiing equipment stand a fairly good chance of further expansion. SWISS CROWDS AT TRADE FAIR: Large throngs of potential consumers attend a recent sample fair, or trade fair, held at Basel. U.S. -made goods were popular IF I" I I I i t * n- :: r f r~~ Counters of Swiss retail shops reflect taste for U.S. goods, opportunities for suppliers European competition keen but quality and style conscious customers create substantial market; retail sales increase By CHARLES LEVY The pattern of Swiss life is so akin to our own that it becomes immediately ap- parent to the observer that this country offers market opportunities for suppliers of many U.S. consumer goods. Although European competition is keen, the counters of retail shops and department stores reflect Swiss tastes for American-made products. In a country which must import con- siderable raw materials for manufactur- ing as well as finished goods which it can- not itself supply, there lies & substantial market, limited in the main only by its specific local characteristics. Doing busi- ness with this highly competent and alert democracy is relatively easy. With a population of about 5.6 million in 1962, Switzerland's imports amounted to over $3 billion. The five principal cities range in size from 440,000 in Zurich to 126,000 in Lausanne; Geneva has 176,000, Basel 207,000, and Bern, the capital, 163,000; 42% of the population is concentrated in principal cities. Unemployment is virtually unknown in Switzerland. In fact, it suffers from an acute labor shortage. The high employ- ment rate has resulted in importation of labor from Italy, Spain, and Greece. In early 1963 over 33%% of the entire labor force provided a demand in the popular and lower price ranges which formerly were of little importance in this quality- minded market. The age groups of the population fur- ther indicate continuing future oppor- tunity. Only 10.4% is 65 years or over; 58.3% is in the 20-64-year bracket and 31.3% is in the 0-19-year age bracket. About 69.3% of the population speak German; 18.9%, French; 9.5% Italian; and the remainder, Romansch, Spanish, and Greek. The gradual increase in wages, cou- pled with full employment and increasing incomes in general, has resulted in mild inflationary pressures — prices rose about 4% in 1962-63 — which the Swiss call the "overheated economy" and which is of great concern to them. Imports kept rising, thus satisfying the greater demand created by a constant increase in popula- tion and spending power. On the other hand, a greater demand for Swiss exports was created by eco- nomic expansion throughout Western Europe. The gross national product increased 12% in 1962, totaling about $10.6 bil- lion. Foreign trade is a vital necessity for Switzerland. It must seek raw materials abroad and export its manufactured prod- ucts. Germany is the largest Swiss supplier. The U.S. furnishes about 10% of Swiss imports, ranks fourth as a supplier, and is the second largest buyer of Swiss ex- ports. Conditions of trade The Swiss economy is essentially a free market economy where businessmen have traditionally avoided Government aid and are opposed to governmental controls. Instead, they have sometimes relied on private arrangements to control competi- tion. The Government relies on voluntary agreements and cooperation between businessmen in its efforts to limit price increases and competition for critically scarce labor. Otherwise, existence of the freedom-of-commerce concept is deeply rooted in the Swiss mind. Switzerland has a liberal foreign trade policy. Tariffs are generally low, although the textile industry enjoys somewhat greater protection. Virtually no consumer goods items — except a few foodstuffs — require import licenses, which are easily obtainable. There are 152 department stores with 86 branches in Switzerland. In addition, thousands of specialty stores serve the principal cities where over 42% of the population is concentrated. Small and medium retail stores have banded together to form association cooperatives or "Ver- baende" which purchase merchandise in large quantities and thus make it possible to compete with department stores. The largest food chain with an annual volume of over $300 million carries, in addition to grocery assortments, a full line of gen- eral merchandise in lines and brands, in the main exclusively sold by them. The large department stores operate through their own central buying organi- zations and bulk their purchases for dis- tribution to their branch or member stores. Department store groups vary in size, the largest claiming a volume of over $100 million annually. The impor- tant stores all have N.Y. buying office affiliations and are constantly kept in touch with changing trends in the market. Retail sales, rising in the last 3 years, have increased 12% in 1962 over 1961 and 9% in the first half of 1963 over the corresponding 1962 period. Masters of display Throughout Switzerland, the stores' housekeeping is immaculate. The Swiss are masters of display and use few manne- quins; instead they "work with wire" to create the illusion of pictures — every- thing seems hanging in the air by means of almost invisible wires suspending mer- chandise from the ceiling. While the stores are gradually develop- ing self-service checkout techniques, they are slow to completely change to this type of operation as we know it in the United States. Departments are well staffed. The average work week is 44 hours, with an 8 to 6:30 schedule (1 3 4 hours for lunch). Stores are not open evenings. Discount sellers are sparse. Price cutting is virtually unknown in de- partment stores. Shopping centers are in the experi- mental stage. Because of the compactness of the country, conventional downtown department stores still remain the hub for consumer buying. One large retail gaso- line distributor is experimenting with a self-service shopping center and is plan- ning to stock this station with self-service automotive, garden, sports, and home needs. He is planning to include a self- service restaurant on the same location. Variety rather than depth will be his con- sumer presentation in his first planned opening in Bern. Most sales in Swiss department stores are for cash. There are few charge ac- counts and revolving credit terms are unknown. There is also little installment buying, but stores are beginning to inves- tigate the possibilities of extending longer credit terms. Mark ups in Swiss stores are slightly higher than conventional U.S. mark ups. Goods are clearly marked, and a one- price policy is strictly adhered to. Sales take place twice a year only and by agreement with stores throughout the country. Prices are not marked down except for 2 weeks in January and 2 weeks in July, when a' special tax is levied on these sale goods. Retail prices increased by 6.1% in the 6 months prior to December 1962 and continued to rise from January to June 1963 by 2%. Qual- ity and appearance continue to be the de- cisive factor in consumers' choice in spite of rising prices. The Swiss are creative in layout and art work and particularly good at illustra- tion. Because of the language problem and need to advertise in all language papers, the Swiss depend considerably on hand- bill distribution where usually one lan- guage will suffice. Competition West Germany is Switzerland's princi- pal supplier of consumer goods. Nearness to the German market is an advantage not easily overcome. Consumer goods, selectively chosen from Italy, Canada, France, and England appear throughout the country. The people are very well dressed. Vogue and Harpers Bazaar are watched for style developments. Swiss buyers (through their N.Y. offices) try to keep abreast of all changes. The Swiss fashion magazine Elle is to be seen everywhere. Assortments in the Swiss stores com- pare with well displayed goods in U.S. stores. Demonstrations of all kinds — kitchen gadgets, household aids, personal monogramming, and the like — can be seen in all types of stores. As many as 10 demonstrations may be seen in one store at the same time. Mail order business The mail order business of the large department stores continues to increase. The largest department store has an an- nual volume of over $6 million in this area and is just getting started. Large well illustrated rotogravure catalogs are dis- tributed by the large stores. Mail orders are efficiently filled on a production line basis — no later than 2 days after receipt. The large department stores have adopted the latest office equipment and unit control facilities. Management con- U.S. Mission to Switzerland October 12 — November 16 Operated in Basel, Zurich, and Geneva. Individual members also visited selected plants and stores in Bern as well as in some of the suburban communities. Operated 3 Business Information Centers equipped with commercial libraries in Basel, Zurich, and Ge- neva. Attended and addressed 18 meet- ings including press interviews, meetings with Chambers of Com- merce, banks, and businessmen'?. clubs. Presented 250 Business Proposals submitted by U.S. firms. Held 240 interviews with more than 300 Swiss businessmen resulting in 1,020 contacts for the 250 U.S. Business Proposals. stantly complains that present require- ments have outrun capacities of the equipment, and larger specially built plants for larger capacity equipment are in planning and building stages. Imports into Switzerland are shipped direct from foreign manufacturers (some from factory to door) ; from stocks main- tained in central or in bonded ware- houses; from Swiss agents representing U.S. manufacturers who ship direct to customers; from wholesalers, who carry stock, and redistribute to retail outlets; and from central stocks of cooperatives. Consumer needs The Swiss, a quality-conscious people, insist on sturdy construction, with all the characteristics — such as wash and wear, sanforizing — of well made articles. Be- cause of cooler summers and longer win- ters, fabrics used are generally of heavier constructions. In apparel, interest is cen- tered on dresses of tricot and jersey, rain- coats in plastic and colorful plaids, stretch pants for women, and teenage apparel in all classifications. Lighter weight men's clothing is selling better than ever. Inexpensive neckties are in demand, as most Swiss and Italian ties are in the upper price lines. Felt hats, particularly Homburg styles, can be seen in most stores. Home sewing is an important part of Swiss life. Large areas in all stores are devoted to the sale of piece goods for garments and home furnishings. There is great demand for U.S. branded lines in men and womens' sportswear, sportshirts, slacks, dungarees, blue jeans, western style pants, cabana sets, pharma- ceutical products, cosmetic lines, new electrical household goods, camping equipment, and sporting goods of all kinds, stationery, office machine equip- ment, hand power tools, and "do-it-your- self" merchandise. Other wanted items are books in 4 languages, garden tools, transistor radios, automatic record play- ers, records — particularly Dixieland jazz band records, costume jewelry, toys, and novelties. How to sell more To sell more goods in Switzerland: ■ Plan to visit your Department of Commerce Field Office to discuss the items you want to sell. If possible, your representative should visit the market to appraise and compare your product with foreign competition. ■ Consider direct exporting rather than licensing agreements. The Swiss complain that Swiss-made products (of U.S. licensors) sometimes take on a Swiss flavor and lose their identity. If the mer- chandise loses the American look it loses it's special appeal. ■ More goods of national brands could be stocked in bonded warehouses. Stores would then realize a larger turnover. The American brassiere and foundation gar- ment industry has done this successfully throughout Switzerland. ■ Consider selling your product through a Swiss agent; they are diligent and dependable. Use the Department of Commerce to make this contact. ■ Investigate the services offered by freight forwarders and other companies in the export trade. There are firms equipped to perform a variety of paper- work and other services at modest cost. ■ Investigate the Foreign Credit In- surance Association plan to obtain financ- ing assistance through commercial banks. ■ Carefully consider your price struc- ture before quoting and make compari- sons with the prices of European competi- tors. -n Plan to exhibit at European Trade fairs. European buyers visit these fairs all over the continent. ■ Your product must be well made and of sturdy construction. ■ Directions, instructions for use, sizes, descriptions should be written in the language of the market for which your product is intended or overmarked with "peel off" labels. ■ Wiring of electrical appliances should be made adaptable to the Swiss voltages and facility requirements. ■ Fashions and patterns should be gen- erally conservative. Sharp, extreme styles are not acceptable as a rule. ■ Suggest that your purchaser set real- istic mark-ups on your product. A well conceived consumer price, even at a lower mark will result in greater gross sales. ■ Advertising allowances should be at least as liberal as those offered to U.S. buyers. The Swiss complain that we are not liberal enough with assistance in this direction — particularly in launching new products. Advise your purchaser of your national advertising program so he can tie in this advertising locally. Many of our national magazines reach this aggres- sive market. ■ Credit terms should be on "open account." Many importers resent letter- of-credit purchasing. German suppliers extend regular 30-day credit terms. Ex- cellent credit information is available through World Trade Directory reports available for the Department of Com- merce, and credit insurance is available through F.C.I.A. ■ Do not overwhelm importers with impossible quantity requirements. Your competitors do sell "small" quantities. Be satisfied to sell in modest quantities. Your business will grow. ■ The Swiss have been irritated in the past by not receiving response to inquiries. Answer promptly and courteously. PRODUCTS COMPETITIVE: Members of the U.S. Trade Mission to Switzerland wno visned the aepanment store "Jelmoli" in Zurich, found that U.S. goods which were moving were those competitive in quality. Highly sophisticated advertising, market research techniques used in Switzerland Chief media newspapers, magazines, trade and technical journals, direct mail, billboards, movies; radio, TV to be authorized soon Highly sophisticated advertising and market research techniques are used ex- tensively in Switzerland. Basically, two types of advertising companies exist in Switzerland. The first type consists of space-brokers who have control over all the advertising of many newspapers, but also plan and carry out advertising campaigns using all media. The second is advertising consultants who do not have space to sell, but specialize in market research and the planning of advertising, merchandising, and public relations campaigns. Market research is closely related to advertising, and a number of firms spe- cialize in this work. A list of Swiss ad- vertising agencies, marketing research or- ganizations, and management and public relations counseling firms may be obtained on loan from the Office of International Trade Promotion, Department of Com- merce, Washington, D.C., 20230. Principal advertising media used in Switzerland are newspapers, magazines, trade and technical journals, direct mail, billboards, and movie theaters. Adver- tising on radio or TV, now prohibited, is to be authorized in the near future; how- ever, Swiss radio and TV audiences may also be reached through German TV or radio from the Federal Republic of Ger- many, Luxembourg, or Italy. Newspapers. More than 500 news- papers are published in Switzerland in three main languages — German, French, and Italian. The newspapers endeavor to appeal mainly to local, regional, or spe- cial interests. Circulation is in most cases limited to from 2,000 to 5,000, and only a few newspapers have a circulation of over 50,000. About 70 newspapers, gen- erally distributed free of charge, are de- voted exclusively to advertising and to local announcements. Periodicals. About 200 periodicals with a total circulation of about 5 million are published in Switzerland. One-half of them are political, cultural, or religious in character and the other half are popular picture magazines. Trade, technical publications. Some 700 to 800 trade and technical journals are published by numerous trade asso- ciations and reach a selected audience. Direct mail. Direct mail advertising of excellent quality, usually printed in four colors, is used extensively. Circula- Principal U.S. exports to Switzerland (1962) and Swiss tariff* U.S. Exports *Swiss (miliom Tariffs of dollars) (ad valorem in 1962 equivalent) Chickens fresh and frozen 6.0 9.9 Wheat 9.0 7.7 Leather 3.6 0.8-1 2.0 Furs dressed and dyed.. 4.6 0.3- 0.7 Tires 3.6 3.6- 3.8 Tobacco, unmanufactured 10.3 5.9-90.2 Raw cotton 6.7 0.06 Man-made fibers and manufactures 8.9 mostly 2.4-22.7 f i Nofiferrous metals, in- cluding ferroalloys.. . 5.0 mostly ( 0.1- 1.7 Mg. 23 Al. 30 Metal manufactures 4.5 mostly 1.9-27.5 Electrical machinery 1 1 .0 mostly Radio and television ap- 2.4- 6.8 paratus and electronic components 7.0 0.9-7.9 ' Office machines.. 7.5 2.9-15.5 Construction, excavating and - mining equip- ment 16.8 2.8- 9.3 Industrial machinery 1 1 .7 mostly 0.24-12.5 Aircraft 24.7 0.03-1.08 Automotive vehicles 11.1 12.8-29.6 Tractors 3.6 17.5 Pharmaceuticals 8.4 mostly 0.04- 8.6 Plastics 5.9 mostly 0.6-17.2 Synthetic collecting re- agents and organic chemicals. 5.9 mostly 0.15-5.32 Photographic and pro- jection goods 5.9 mostly 2.5-11.4 Scientific and profes- sional instruments 3.7 mostly 0.7- 6.2 Jewelry and precious metals 9.5 mostly 0.6- 5.8 Sources: U.S. Bureau of the Census Statistics; ad valorem equivalent — Statistique Annuelle du Commerce Exterieur de la Suisse. * Duty rates are expressed in percentages. tion is aided by the efficiency of the Swiss postal services. . Outdoor publicity. Use of posters and billboards is largely a monopoly of a single company. All posters are of a standard size, 35.63 x 50.39 inches, and are placed at locations owned and chosen by the company. Another firm has the exclusive right to advertising in railway stations. Films and slides. Advertising films are shown at the beginning of most movies in Swiss theaters. They are restricted to about 4 minutes running time, and it is a common practice to project two or three shorter films. U.S. share of Swiss toy, game market could be expanded Instructions should be printed in German and French; some packaging should be condensed By MARVIN BARAB By paying attention to some of the specific requirements of the Swiss market for toys, the U.S. portion of that market probably could be increased significantly. Toy stores or toy departments of a de- partment store in Switzerland compare favorably with similar stores in the United States, except that only small por- tions of the goods shown are of domestic origin. Toys from many countries are repre- sented, primarily from Germany, France, and Italy, in that order. As in the United States, the inexpensive toys are primarily from Japan and Hong Kong. Toys from the United States are pri- marily mechanical novelty items, often the same ones that are highly promoted in the United States. For preschool toys, wood products are seen more than in the United States. There appears to be a greater reluctance to accept plastic pre- school toys. Educational and scientific toys appear to be of more importance than in the United States, as indicated by the amount of space devoted to these items at the retail level and by requests from agents and representatives seeking additional U.S. items. Model airplane and car kits of Ameri- can design are well received, as are model railroads, car races, and their accessories. Export of these products can probably be further expanded by U.S. firms. Games popular Because of the exceptionally high level of education and literacy, games appear to be particularly popular in Switzerland but only a few from the United States are represented. Many U.S. games are not suitable unless the language portions are modified to German/French. In conjunc- tion with possible exports to other Ger- man and French speaking countries, spe- cial game adaptations might be well re- ceived in the Swiss market. Where possi- ble, the package wording itself should be in both German and French. Sale of U.S. products is handicapped by the distance the goods must be shipped. The trend in the United States is to larger, more attractive packaging, giving the im- pression of greater value. At the same time, such packaging works to the prod- ucts' disadvantage for export to Switzer- land (to any European country), because of the increased bulk. In some instances it might be advisable to have special, more condensed packaging for the Swiss and other European markets, or ship the toys in bulk and have them repacked at a European distribution point. Distribution Distribution of toys in Switzerland is more concentrated than in the United States. The retail market is dominated by one chain with 19 retail stores throughout the country. Next in importance are the toy departments of the major department stores, followed by the smaller independ- ent toy stores, variety stores, and drug stores. The company with the chain of 19 stores is also quite active as a distributor to other outlets, having exclusive supplier contracts with many of them. According to an official of this company, over 60% of the higher priced toys sold in Switzer- land, and over 30% of the lower priced merchandise, are sold through their own stores or through their jobbing operation. The larger retailers prefer to import di- rectly for their own account. The smaller outlets often find this impossible because of the required quantities and will pur- chase through jobbers. Several agents and manufacturers' representatives sell to both the larger retailers and to the jobbers. In practice, however, for a toy or game to be successful in Switzerland, it must be sold to the one large chain, as it controls such a significant portion of the Swiss market. As the major department stores cooper- ate with rather than compete with the toy specialists, it is not usually necessary to grant exclusive distribution rights. Unique promotion There is little of the price competition among toy stores that is so prevalent in the United States. Prices, in general, are well maintained, at quite a high level. An interesting approach to arts and crafts is used by the leading Swiss depart- ment store. A significant portion of the department is devoted to work areas for children. Each area is set up for 10 to 15 children and is devoted to a specific craft area, with an instructor in attendance. The materials, of course, are purchased at the store. By early October, every seat is occupied every afternoon by children making Christmas presents. 8 Swiss interest in recreation is green light for U.S. exporter; sports goods market booming Major opportunities are for high-quality products which offer features not found in European items; suppliers should be willing to accept small orders By MARVIN BARAB Exports of U.S. sporting goods and outdoor recreation equipment to Switzer- land could be materially increased during the next few years because of the coun- try's high standard of living, the interest of the Swiss population in sports and outdoor activities, and their insistence on quality products. Although the potential is obvious, exports will be expanded only through active solicitation by U.S. firms who must be willing to adapt to the requirements of this small but wealthy land. The variety of sporting goods available in Switzerland indicates that this is a sports and recreation-minded country. The market for these products is booming and apparently growing faster than the economy as a whole. Emphasis on specific sport activities varies considerably from that in the United States, but with a few exceptions most familiar categories of sporting goods are available in Switzerland. Notable exceptions are baseball, football, and basketball as they are known in the United States. As is true for many other categories, imported goods are readily accepted. In- deed, only a small portion of the sporting goods sold in Switzerland is domestically produced. Of total imports in this field, Germany supplies the largest portion followed by the United States, France, and Italy. Goods from U.K., Canada, Norway, Japan, Pakistan, Austria, and Australia also are found. In general, al- though such goods from Soviet bloc countries are often much cheaper and of acceptable quality, there is reluctance on the part of Swiss firms to sell these items. U.S. products have already made a major impact on the Swiss market, especially skis and archery equipment, and to some extent fishing equipment. The U.S. position as a major sporting goods supplier for Switzerland is due, primarily, to the popularity of several brands of American skis. Other U.S. items con- tribute only a small portion of total U.S. exports of sporting goods to this country. U.S. metal skis most popular Major opportunities for export expan- sion are for high-quality products which have no direct competition or which offer features not ordinarily found in European products. An excellent example is the penetration American metal skis have made. Now the most popular skis avail- able, they account for a substantial por- tion of total U.S. sporting goods exports to Switzerland. At present, skiing and camping prod- ucts dominate the sporting goods market in Switzerland. It is estimated that these two areas are about equal in importance; combined, they account for over 50% of the total sporting goods and outdoor recreation equipment retail volume. One major retailer estimated that in this country of 5.5 million people, be- tween 600,000 and 700,000— over 10% of the population — are active skiers. An indication of the popularity and encour- agement given to this activity is the fact that the Zurich city school system owns over 4,000 sets of skis which students may borrow for weekend and holiday use. During the ski season, virtually every set is in use every weekend. Good ski slopes are within a couple of hours travel from practically anywhere in Switzerland. Camping, for many years a popular family weekend and holiday activity, is still growing rapidly. In general, vaca- tions for Swiss workers are longer than in the United States, usually 3 weeks a year at the lower levels, increasing in length for more important positions. SNELL SHOPS SWISS SPORTS: Charles Snell, mem- ber of the Trade Mission to Switzerland, examines U.S. -made skis over there, finds them competitive. Travel camping on increase Most retail outlets are amazingly un- familiar with the latest American camp- ing developments. The magnitude of the Swiss market for camping products is so great that it should no longer be ignored by U.S. manufacturers. The Swiss pub- lic, as a result of tourists primarily from Germany, is now becoming familiar with the camping tent-trailer. The U.S. tent- trailers in general are far more advanced than any made in Europe. With proper market development, Switzerland should provide a good market for these trailers. Another American item conspicuously absent from the Swiss market is the rapid assembly tent. True, the bulk of Swiss campers prefer the larger multiroom tents usually set up in one location for several weeks or more, but an increasing number are becoming travel campers. For this group, there are no tents similar to the rapid assembly ones found in the United States. Down-filled sleeping bags are popular and quite inexpensive. The synthetic fill varieties are also available, but not in the style popular in the United States. The U.S. style, with the canopy, elicited great interest on the part of agents and retailers. Rubberized air mattresses im- ported from France and Germany are often used in conjunction with foam mattresses. Plastic air mattresses are rarely used. U.S. EXPORTS TO SWITZERLAND/ 1962 BY PRINCIPAL COMMODITY GROUPS Metals and manufactures except machinery and vehicles 4.3% Non-metallic minerals 4.1o/o Wood and paper 1.60/c Textile fibers and manufactures Vegetable products, except fibers and wood, inedible Animal and animal products inedible Chemicals and related Miscellaneous products products Source: Based on U.S. Bureau of the Census Data Camping stoves, lanterns and heaters are operated from bottled gas rather than gasoline. These appliances, usually im- ported from France, are quite modern looking and come in many varieties. Little opportunity in this field seems likely, unless U.S.. manufacturers offer products with demonstrable advantages, including price, over those available from France. Archery, although not yet a major activity in this land of William Tell, is showing a healthy growth, with most of the equipment coming from the United States. Further efforts in this area might well increase U.S. exports. Indoor archery lanes, now becoming popular in the United States, have not yet appeared in Switzerland. Potential for golf supplies Golf, still a limited activity in Switzer- land, could show greater growth in forth- coming years, to the benefit of U.S. ex- porters who now supply the bulk of Swiss imports of golfing supplies. Before a substantial volume business can develop, however, more golf courses will have to be established in this country where land is expensive. Most existing courses belong to the more luxurious hotels for tourists or to private clubs where the membership rates are high and the waiting lists long. Switzerland would appear to be an ex- cellent market for the "Par 3", or com- pact golf courses which are now appear- ing in the more populous areas of the United States. Licensing and exporting of equipment for these courses, as well as the resulting demand for personal golf equipment, could yield substantial dollar exports. Bowling was introduced to Switzerland (in Geneva) relatively recently, and prospects look promising. Plans are un- derway for expansion into other Swiss urban markets. Thus, the market for bowling equipment — balls, bags, and shoes — should materially increase. Although Switzerland has many moun- tain streams, rivers, and lakes, fishing is not as popular as in the United States. Growing in importance, however, it does provide a definite export possibility. U.S. fishing lines, fishing rods, and lures can already be found in this country, but distribution is spotty. Fiberglass rod blanks are sought for finishing domes- tically. Most fishing equipment is • im- ported from France, Germany, and the United States; some items, including rods and reels, are produced domestically. Interest in U.S. boats Interest has been growing in boating, as well as in all types of U.S. pleasure boats. Many inquiries were received by the Mission, concerning both importing boats and licensing of U.S. products. In general, the interest centers around smaller runabouts and boats up to 16 feet. Similarly, there is definite interest in boat- ing and marine accessories, including hardware and life preservers. Sailing, long a popular recreation in Switzerland, is expanding rapidly. Water skiing, scuba, and similar water activities have recently shown strong growth. Most scuba products are imported from Italy, France, and Germany. There might be a possibility for U.S. exports of the latest in scuba developments. A wide selection of tennis products is available in Switzerland, including cheaper products from Pakistan as well as better quality items produced in the U.K. The better rackets are imported but strung locally. Distribution patterns The typical sporting goods store in Switzerland bears little resemblance to sporting goods stores in the United States. Swiss stores are usually far more special- ized. Thus, one finds stores specializing in fishing equipment, in hunting equip- ment, and in skiing and camping equip- ment. Few stores carry any variety of golfing products; these products are han- dled almost exclusively by golf course professionals. There is practically no price competition between retail outlets. The so-called sporting goods stores place almost as much emphasis upon clothes for sports as upon the actual sporting equipment. As much or more space, for example, will be devoted to ski jackets, slacks, and other sporting clothes- as to skis and related equipment. The closest thing to a typical American sporting goods store would be the sport- ing goods department of major depart- ment stores. In these stores, all sporting ■ goods are usually coordinated into one department. Even here, however, hunting products will not be found; guns, rifles, and related equipment are the exclusive province of the specialists. In general, the variety of different prod- 10 ucts within any given category is far wider than would traditionally be found in the United States. A multitude of brands from each major producing coun- try is represented. The typical sporting goods dealer feels that he must offer the full variety to his customers, or they will go to a competing store, or even to a neighboring country to find what they want. Retailers often feel that their personnel are all experts in their respective fields and must know as much or more than any of their customers. As a result, self- service selling for these products is slow in coming. There is some evidence of it, however, in the department stores, par- ticularly for the lower priced merchan- dise. The larger department stores, depart- ment store groups, and larger independ- ent stores prefer to import or purchase di- rectly from manufacturing sources, when- ever possible. Because of the wide range of products that most stores carry, how- ever, there is a strong reliance upon the top two general and five or six special- ized wholesaling firms. Hints to potential exporter The market for sporting goods and out- door recreational products in Switzerland is an extremely high-quality one: it is im- probable that the lower priced promo- tional goods will find a satisfactory mar- ket. A complaint often registered by Swiss firms is that U.S. manufacturers too often require minimum order quantities which are too large for most Swiss firms, espe- cially for initial orders. In general, most Swiss firms wish to place relatively small initial orders, to test the local market and to confirm transportation and customs charges. Too often American manufac- turers are not willing to accommodate these small initial orders and many times do not show the Swiss customers the courtesy of a reply. Unfortunately, this often discourages further inquiries by the Swiss businessmen. To whatever extent possible, the U.S. firm should have a local representative or agent, unless the firm is able to grant exclusive rights to one distributor or buy- ing group. Switzerland, centrally located, can often be the base for an agent or rep- resentative servicing not only Switzerland, but also adjacent countries, particularly France, Austria, Germany, and Italy. Whenever written instructions are nec- essary for a product, it is important that they be furnished in both German and French, the two major languages for Switzerland. Lack of such instructions necessarily limits the potential of any item in this country, even though many people speak and read English. Swiss market good for U.S. exporter of foodstuffs Best approach is contact with buying organizations By JOSEPH B. HALL Switzerland is small compared with other European countries, but its econ- omy is sound and booming. The high standard of living, the ab- sence of unemployment, the new foreign element in the working class, the gradual change to U.S. methods of merchandising all make this an attractive market for the U.S. food manufacturer and exporter. Be- cause of the extreme competitiveness of the Swiss market, however, only an ag- gressive sales campaign by U.S. produc- ers or exporters will bring results. The country, with its booming econ- omy, is not self-sufficient in food. About one-third of its food requirements are imported. Of total imports, food repre- sents 15%— $500 million in 1962. Much of this food is imported from neighbor- ing countries. Food prices are high, except for fresh fruits and vegetables in season. Meats are especially high — an opportunity for U.S. exporters of canned meats. Food retail sales annually exceed $1.5 billion. Foodstuffs are distributed through the following outlets: Retail group, end of 1959 Total Self- stores serve Private retailers affiliated with bulk purchasing organ- izations Usego 4,310 134 Alro 4,200 1 19 Kolonial E. G. 1,120 28 Liga-Einkaufsvereinigung 535 10 Schweiz. Handelsgesellschaft (S.H.G.) 558 17 Chainstore undertakings Union of Swiss Consumers Societies (V.S.K.) 3,250 610 Migros Cooperatives 367 335 Verband Ostschweizerischer Landwirtschaftlicher Genossen- schaften 600 — Konsum Denner, Zurich 207 35 Konsum Verein, Zurich 184 48 Merkur (coffee specialist) 192 — Simon A.G. 109 5 Waren-Giro Genossenschaft, Zurich 44 20 Kaisers Kaffee-Geschaft A.G. Basle 92 1 Other small chain-store businesses 50 6 Private retailers (estimated) 4,850 70 IOWA LAWNMOWER: A lownmower, powered by on engine made in Iowa, is inspected by members of the Swiss Trade Mission in a large Zurich store. Total 20,668 1,438 Source: Survey by Sweda-Registrierkassen A.G., Zurich. The two large cooperatives, V.S.K. and Migros, accounted in 1962 for al- most one-third of the total food sales in Switzerland and for almost two-thirds of the self-service stores. These coopera- tives maintain aggressive buying organi- zations. Many wholesalers sell through volun- tary chain organizations. Independent re- tailers account for about 65-70% of total, food sales. There are few corporate chain food stores. The independent retailers buy from wholesalers, although there is some direct store selling by producers. Separate wholesalers handle dry gro- ceries, meat, fresh fruits and vegetables. Swing to self-service There has been a rapid swing in re- cent years to self-service stores. The aver- age size of self-service stores in 1959 was 1,400 sq. ft. as these represented con- versions of existing small food stores. Land values are high, and apparently the cost of buying properties and demolish- ing buildings for retail food store sites is prohibitive. Most stores are in densely populated areas. The number of automobiles, the narrow streets, and the high cost of land have retarded development of supermar- 11 Market profile— Switzerland Switzerland: A Federal Republic of 22 sovereign cantons. Landlocked, situ- ated in the heart of Europe, mostly mountainous. Capital is Bern with popu- lation of 166,100; largest city and commercial center, Zurich with population of 439,600. Geography: Area of 15,944 square miles (about twice the size of New Jersey). Principal mineral production in 1961, cement (3.6 million tons) and salt. Population: Mid-year 1962, 5.6 million of whom 2.7 million were employed. No unemployment. Income: One of the highest standards of living in Europe; GNP about $10.6 billion in 1962; $1,888 per capita ($2,974 in U.S.). Agriculture: Well developed dairying and stock raising (3.1 million metric tons of milk produced in 1962); 69 million pounds of cheese and 21 million pounds of chocolate were exported in 1962. Principal crops which do not cover domestic requirements: Potatoes, bread, and feed grains. Industry: Highly developed. Principal industries: Machinery, watches, instru- ments, chemicals and pharmaceuticals, and textiles. Transportation: Railroads, 98% electrified, carried 4.6 billion passenger- kilometers and 7.8 billion ton-kilometers in 1962. Airlines carried 1.6 billion passenger-kilometers in 1962. Finance: Currency is the Swiss franc (4.33 to $1). Foreign exchange and gold reserves at end of January 1963, $2.6 billion. Important contributions from tourism, international banking, and insurance income. Exports: Total exports, 1962, $2.2 billion: To Europe, $1.4 billion; to U.S., $212 million — wrist watches and clocks $66 million, machinery and vehicles $40 million, textiles $29 million. Imports: Total imports, 1962, $3 billion: From Europe, $2.3 billion; from U.S., $294 million— machinery and vehicles $117 million, chemicals $5.1 million, textiles $19 million. Conditions of trade: As member of European Free Trade Association, Switzer- land grants other EFTA members 50% tariff reduction on industrial products. Next 10% reduction scheduled for December 31, 1963. Liberal foreign trade policy, with import quotas for a number of agricultural products. kets as we know them in the United States. There are a few, with areas rang- ing from 7,000 to 14,000 sq. ft. for food, and these appear to be successful. There is only one shopping center in Switzerland, as far as the Mission could learn. Located in Geneva, it contains two good sized self-service food stores with sizeable non-food departments. A branch department store is also under construction, and there are several smaller shops. Parking for 500 cars is provided. Other shopping centers are planned. The small size of most food stores limits the variety of products handled. There are usually only a few brands with- in each category of canned food. There are competing brands of soap and cleans- ers. Swiss, Danish, and U.S. frozen poul- try are displayed. Limited space in most stores makes it difficult for the U.S. exporter to establish competing lines in the small retail in- dependent outlets. However, the large cooperatives and wholesalers do present good selling opportunities as they are looking for lower cost items. One of the cooperatives will handle import items only if it has the exclusive sale for the products throughout Switzerland. Newspapers are not too effective for advertising in the food field, as they are localized and appeal mainly to ethnic groups. Handbills are in general use, and many include coupons comparable to sales promotion in the United States. The large cooperatives which send out regular mailings to their members, use coupons, and in some instances stamps and other merchandising devices. Market for specific items Specific products which would have appeal in Switzerland are: Vegetable and animal fats and oils, which should be shipped in bulk for packaging in Switzer- land; rice; dog and cat foods; frozen tur- keys and ducks; canned meats, corned beef, and other meat specialties. High- priced food specialties, especially canned food, would have an advantage as import duties are based on weight. There should be an opportunity for quality toilet tissue, as the quality generally is poorer than in the United States. The best approach for the U.S. ex- porter of food is to communicate with the buying organizations of the cooperatives and large wholesalers who dominate the field, quoting wherever possible c.i.f. prices. Products should be packaged in terms of the European metric system. They should be marked, even where not required by Swiss law, as coming from the United States, as U.S. foodstuffs are considered a status symbol. Instructions should be printed in the language of the area. Swiss buying less citrus; U.S. market share drops Total Swiss imports of fresh citrus dur- ing the first 8 months of 1963 declined to 68,555 metric tons from 78,051 in the same period of 1962. Imports from the U.S. declined from 2,250 metric tons to 1,409 metric tons, and the U.S. share of the Swiss market slipped to 2.1 % from 2.9%, according to the U.S. Embassy in Bern. Swiss imports of citrus juices also de- clined, dropping to 2,022 metric tons from 2,896 metric tons in January-Au- gust 1962. Imports from the U.S. slumped nearly 40% to 1,064 metric tons, as the U.S. share of the Swiss im- port market for these products dipped to 52.6% from 59.9%. Swiss currency, weights, measures The Swiss franc, divided into 100 centimes or rappen, is the basic unit of currency. The prevailing exchange rate of the Swiss franc is $0.23, or 4.3 francs to the U.S. dollar. The metric system of weights and measures is used in customs transactions: One metric ton equals 1,000 kilograms; 1 kilogram equals 2.2046 pounds; 1 meter equals 39.37 inches; and 1 liter equals 1.0567 quarts. Swiss have over 100 warehouses totalling 5 million square feet Switzerland has over 100 warehouses; 12 bonded ones are owned by the Swiss Customs Administration. An important center is Basel with its Rhine River port; others are Zurich, Geneva, and St. Margrethen at the Austrian frontier. Cold storage houses number about a dozen. The total capacity of all storage houses is estimated at more than 5 mil- lion square feet, and open areas total about 2 million square feet. 12 Selected large, small U.S. appliances finding acceptance in Switzerland Less than 50% of Swiss homes have refrigerators; few have dishwashers, freezers; market growing for TV, tape recorders; labor shortage spurs desire for work-saving devices By SAMUEL S. WURTZEL The Swiss market offers favorable op- portunities for export of selected U.S. major and small appliances. Rapidly increasing incomes and the shortage of labor makes the use of labor- saving devices more and more desirable. Although some gas is used for cooking, electricity is the popular source of power. It is believed that there will be no appre- ciable market for U.S. gas appliances in Switzerland. The Swiss are meticulous in their pro- duction of domestic merchandise and ex- pect top quality in imported goods. At the same time, they are extremely experi- enced in obtaining good value for their money. The electrical current predominantly used throughout Switzerland is 3 phase, alternating 220/380 volts, 50 cycle. Elec- trical plugs in use are different from those in the United States and manufac- turers intending to enter the market will need to modify their products to conform. The standard module for kitchen equip- ment is 21 '/2 inches wide by 23V2 inches deep. Heights vary from 33Vi to 351/2 inches. • Before introducing a new appliance on the Swiss market, one unit must be sub- mitted for approval of quality and safety to the Swiss Electrotechnical Association (Schweizerischer Electrotechnisher Ver- ein, 301 Seefeldstrasse, Zurich). Specific information regarding standards and safety requirements may be obtained from that organization or from the Association of Importers of Electrical Apparatus (Vereinigung Schweizerischer Importeure Electrischer Apparate, 39 Bahnhofstrasse, Zurich 1 . Refrigerators, freezers Less than 50% of the homes in Swit- zerland have refrigerators. As the most popular size in current use is V/i to 4 cubic feet, these will become more" and more inadequate as buying habits change and the use of frozen foods increases. At present, an insignificant number of large refrigerators are sold by the major U.S. companies. Development of self-service supermar- kets and rapidly increasing use of frozen foods indicates a sizable market potential for larger refrigerator units with freezers. As more housewives enter the labor mar- ket, their habit of shopping daily for food must change and the need for larger re- frigerators will be apparent. Small refrigerators are manufactured locally. Imports are from West Germany, France, Sweden, England, Italy; a few are from U.S. companies, most of them manufactured in Europe. U.S. -made re- frigerators are not designed to provide space for the tall one-liter bottle that is customarily in use in Switzerland. Few freezers are in use in the coun- Jry, but a market for this item will surely develop. Small-size units are likely to have the strongest sales potential, because of the limited space in homes. Some small units are being manufactured in Switzer- land; imports come primarily from Ger- many and some from France and Italy. A few are imported from U.S. companies manufacturing in Europe. Other household appliances Some dishwashers are being sold, but the market is virtually untapped. Several U.S. brands are being offered, but the most popular are the Swiss, of which there are 5 or 6 makes. Less than 25% of the homes have automatic or semiautomatic washing ma- chines. This market is expanding rapidly now, and the volume of sales should in- crease each year. Automatic washers are manufactured locally. Imports are pri- marily from West Germany, with a small number from other European countries. Swiss brands are the most popular. Because of the lack of large hot water heaters in homes, 90% of the automatic washers have heating elements in them to raise the water temperature to a range of from 40° to 95° centigrade or 104° to 204° Fahrenheit. Most machines have a control that permits selection of water temperature to suit the type of fabric to be washed. Heating elements vary from 5,000 to 7,500 watts. The market is not large for clothes dryers at present, and development is ex- pected to be slow. A few are imported from U.S. companies manufacturing in European plants and some from West Germany. Dryers are also manufactured in Switzerland. TV market growing Both electric and gas ranges are manu- factured locally. While there are some imports from West Germany and a minor tIMITED VARIETY: The small size of most food and few food stores carry a stock such as shown stores in Switzerland limits the variety of products in this large department store visited by the Mission. 13 number from other European sources, the Swiss makes are the most popular. The TV market is growing and U.S.- made products have excellent acceptance. West German, Dutch, and Japanese man- ufacturers dominate the market. Sales of television sets are currently estimated to be about 7,000 units a month. There is a big demand for tape record- ers for both high fidelity music reproduc- tion and low-priced transistorized or elec- trical units. Japan and West Germany are the dominant suppliers in the market. Some high-quality U.S. units are sold here, but the market for U.S. tape re- corders could be substantially increased through a thorough study and effort by U.S. manufacturers. Hi-fidelity components Hi-fidelity components offer an excel- lent undeveloped market. The reputation of U.S. manufacturers in this field indi- cates an acceptance that could provide a good opportunity for U.S. manufacturers. Credit is not merchandised at all. Credit is obtainable — but only with ef- fort — and is severely limited. A strong effort to merchandise credit would ex- pand the market for major appliances. Some U.S. small electric appliances are sold here; however, the market for imported items is limited, as a variety are manufactured locally. Some are im- ported from West Germany. Expansion of U.S. exports will depend on their new- ness and the willingness of U.S. manu- facturers to produce them with Swiss elec- trical requirements. Typical retail prices in the market are as follows: Single-door refrigerators with dial defrost, 3Vi to 4 cu. ft., $150-$ 190; 6 cu. ft., $210-$225; IU/2 cu. ft., $350- $425. Double-door refrigerators, completely frost-free, 13 cu. ft., $950. Upright freezers with dial defrost, 8 cu. ft., $350; 15 cu. ft., $600. Undercouuter automatic dishwashers, $600; automatic clothes-washing ma- chines, $400 to $600. Television 19-inch thin portables, $300- $350; 23-inch table models, $400-$450. Electric floor-polishers, twin-brush, $80. SWITZERLAND: TELETYPING Teletype machines in Switzerland to- taled 4,600 at the end of June 1963, an increase of 723 over those of a year earlier. There are now 84 units per 100,- 000 inhabitants. SWISS STORE DISPLAYS: The U.S. Trade Mission to Switzerland found that attractive store displays often replace extensive TV, radio, and newspaper advertising. Photo was taken in Jelmoli store, Zurich. 14 Background: Swiss economy, demands, credit terms Rising Swiss consumer spending brightens U.S. export prospect Drop in U.S. aircraft sales may cut trade total in 1963 but strong demand continues for clothing, labor-saving tools, plant modernization equipment, other products Switzerland's confirming prosperity off- ers good prospects for increasing the sales of various U.S. products in the Swiss market. Total U.S. exports to that market, however, may be lower this year. In spite of a slight slowdown of ac- tivity in a few economic sectors, the out- look for the Swiss economy for at least several months ahead appears to be ex- cellent. Domestic consumption is rising. Industries are fully occupied and both exports and imports are on the rise. However, the chances for an overall increase in U.S. exports to Switzerland are not very good in this calendar year. Swiss total imports are not expected to rise as sharply this year as in 1962, and imports of a few U.S. commodities are showing a decline. There are, though, excellent possibili- ties for further expansion of U.S. sales of a wide range of products both in con- sumer and capital goods categories for which demand is growing. U.S. products in demand Rising standard of living and changing living patterns of the Swiss population, which has more leisure time at its dis- posal, favor demand for sportswear, casual clothing, camping equipment, and other outdoor living accouterments. Swiss department stores have been suc- cessful in selling such U.S. products, as well as toilet articles, toys, hardware, glassware, various gadgets, tableware, terry cloth items, dresses, lingerie, chil- dren's clothing, and foodstuffs. The last three categories sold especially well. In the industrial field, opportunities for U.S. goods appear to be equally good. In view of the continuing labor shortage and rising wages, Swiss producers are relying more and more on increasing productivity through plant modernization. As a result, there is a demand for sophisticated labor-saving U.S. machine tools, for handling equipment, and for electric and electronic controls and test- ing instruments. Further mechanization of the construction industry provides a ready market for U.S. construction equip- ment especially of the heavy type. How to sell Because of Switzerland's generally lib- eral trade policy, low customs duties, and continuing prosperity, the market is strongly solicited by European producers who demonstrate significant flexibility in adjusting their products, credit terms, and advertising allowances to Swiss condi- tions. To sell successfully in Switzerland the U.S. exporter must be able to counter this competition by displaying similar flexibility. He should also keep in mind that to Swiss importers the quality of merchandise, as well as seller's ability to deliver on time, are often more important than price. Foreign trade up Swiss foreign trade continued to show a sizable deficit. According to Swiss sta- tistics imports in the first half of 1963 reached $1,577 million while exports totaled $1,148 million, showing respec- tive increases of 4.3% and 7.9% over trade in the first half of 1962. U.S. exports to Switzerland in the first half of 1963 declined to $145 million from $154 million for the first half of 1962, according to preliminary U.S. Bu- reau of Census statistics. This decline was primarily the result of a sharp drop in sales of U.S. aircraft from $19 million to less than $2 million. A large decline, however, has been ex- pected as Swiss demand for U.S. jet air- liners has been essentially satisfied during the past 3 years. U.S. exports of foodstuffs, principally grains and poultry, have also declined significantly. Part of these losses, how- ever, has been offset by sharply increased exports of U.S. manufactured goods and chemicals. As a result of the overall decline in U.S. exports to Switzerland, and the in- crease in total Swiss imports, the U.S. share of the Swiss import market de- clined to 8.6% from 10.4% for the first half of 1962. In contrast, the Common Market coun- tries increased their aggregate share of the Swiss import market from 62.7% to 64.6%. Industry active Swiss industry as a whole remained fully occupied during the first half of this year. Several Swiss producers of heavy machinery have recently received important orders, from various oversea countries, which will take two to three years to complete. Although declines in new orders have been reported by certain machinery producers, the machinery and metals industry as a whole has an average order backlog of about 10 months. Many Swiss businessmen believe, how- ever, that orders will generally decline in the future as a result of increasing spread between the Common Market external and internal tariffs. The Common Market area takes over 40% of Swiss exports. All four principal Swiss industries — machinery, chemical, watch, and textile — which together account for 80% of total Swiss exports and 17% of Swiss gross national product, registered export gains during the lanuary-June period of 1963. In the construction sector, there was a significant slowdown in housing com- pletions. Tourism was another important sector where activity declined. Retail stores benefited from brisk con- sumer buying which boosted their sales in the first 5 months of 1963 about 9% above the level recorded in the com- parable period of 1962. 15 Few Swiss imports require licensing; subject to duty, surtax, sales taxes Marks of origin required on matches, food dyes, some foodstuffs; U.S. exporters to Switzerland can collect in dollars Although most commodities may be imported into Switzerland free of import licensing, a number are subject fo licenses which, however, are usually automatically granted. There are, however, a number of products for which license applica- tions are carefully screened, including certain trucks, some textiles and a num- ber of agricultural products. Import certificates, so-called Certifi- cates, bearing a guaranty of nonreexpor- tation are issued by the Swiss authorities when required by the supplying country. Other Regulations The importation of sugar, cereal and feed grains, pulses, foodstuffs and fodder materials, straw and peat litter, oleaginous seeds and fruits, various edible fats and oils, cocoa butter, coffee, fertilizers, coal, and petroleum products is handled by state-supervised individuals, or organiza- tions. The importation of monopoly articles, notably alcohol, salt and gun- powder is reserved to specially authorized organizations. Marks of origin must appear on ship- ment of food dyes, fresh and preserved eggs, fresh and preserved meats, and matches. The phrase, "Made in U.S.A." is acceptable for such marking. BEAUTY AIDS: U.S. cosmetics find o market in Switzerland. Import Duties Nearly all Swiss duties are calculated on a specific basis. Specific duties are assessed on the basis of the gross weight, except in cases where the tariff provides for collection of duty on a per unit basis. The latest Swiss tariff schedule, based on the Brussels nonmenclature, became effective January 1, 1960. Customs Surtaxes A statistical tax of 3 percent on total Swiss customs charges is levied on nearly all items. Supplementary duties are levied on cereals, potatoes, butter, beer, and some other food products. The basic sales tax is 5.4 percent for wholesale trade and 3.6 percent for retail trade. For both wholesale and retail trade some items are reduced to 2.7 per- cent and 1.8 percent, respectively. A few products are tax free. With the exception of manufactured tobacco, the tax is levied on the duty- and tax-paid value, i.e., the price f.o.b. Swiss border plus customs duties and other fiscal charges. The sales tax on manu- factured tobacco is assessed on the aver- age value f.o.b. Swiss border, not includ- ing customs duties or other fical charges. Merchandise imported by letter mail is taxed at the specific rates with subsequent adjustment where necessary. Exchange Controls Imports from the dollar areas may be paid for in any currency acceptable to the seller. Foreign exchange for such transactions is readily available from commercial banks and other sources without requiring specific authorization from the Swiss Government. Payments to some nondollar countries are made through clearing accounts. All matters pertaining to foreign exchange come un- der the jurisdiction of the Swiss Clearing Office. Swiss consulates in 10 U.S. cities offer business information The official commercial representative of the Government is the Economic Counsellor of the Embassy of Switzer- land, 2900 Cathedral Avenue N.W., Washington 8, D. C. Besides this office, Switzerland main- tains consulates in the following cities of the United States where commercial in- formation can be obtained: Lincoln Tower, 75 East Wacker Drive, Chicago 1, 111. 740 South Broadway, Room 511, Los Angeles 14, Calif. 444 Madison Avenue, New York 22, N. Y. 226 South Sixteenth Street, Philadel- phia 2, Pa. 55 New Montgomery Street, San Francisco 5, Calif. 199 Washington St., Room 704, Bos- ton 8, Mass. 1946 Illuminating Bldg., 55 Public Square, Cleveland 13, Ohio. 236 International Trade Mart, New Orleans 12, La. 1012 Ambassador Bldg., 411 N. 7th St., St. Louis 1, Mo. 715 Jones Bldg., 1331 Third Avenue, Seattle 1, Wash. Swiss TV, radio stations to carry commercials Swiss TV and radio stations soon will carry commercials, the U.S. Embassy in Bern reports. Commercials will be broadcast only during certain hours. Advertising time will be differentiated from the regular programs, which seems to imply that sponsored programs are not yet on their way in. Regulations governing both TV and radio commercials will strictly control advertising of drugs and medicines, limit advertising of alcoholic beverages, and ban advertising of leasing and renting operations. The number of television set owners in Switzerland increased during 1962 on an average by 6,700 a month. At the end of 1962 the total number of TV set owners in Switzerland was recorded at 273,894. At the end of July 1962 there were 2 million radio receivers in use. It is estimated that sales of radio sets in 1962 exceeded 50,000. 16 Overseas traders, listed below, want to do business with American firms. Commodities they wish to buy or sell are identified by description and by Standard Industrial Classification (SIC) Manual number. Other symbols used: + — Additional information on the trade opportunity may be obtained by writing Commodity Export Promotion Staff, BDSA-111, Department of Commerce, Washington, D.C., 20230. NCIA — No commercial information available on the overseas firm. WTD — World Trade Directory report available. WTD reports give a de- scription of the firm, its sales territory, size of business, sales volume, trade and financial reputation and other data. Copies can be bought for $1 each from the Commercial Intelligence Division, Bureau of Inter- national Commerce, U.S. Department of Commerce, Washington, D.C., 20230. Numbers following the WTD symbol show the date the report was issued. I.R. — Interview Report, identified by following number, is available on the trader. These reports are compiled by the Trade Mission. Copies can be obtained from Trade Mission Division, Bureau of International Commerce, U.S. Department of Commerce, Washington, D.C., 20230. Leads for Exporters 200 Food Swiss distributor of dairy and agricultural products in Europe and the Middle East seeks to import additional products. Dairyworld Sa. 10, quai Girstave-Ador, Geneva. I.R. 235. Manufacturing concern seeks distributorship for Switzerland of brand name food products. Veron & Cie, Seilerstrasse 3, Bern. WTD 10/7/59. I.R. 2.* Sales agent seeks exclusive distributorship of non-perishable foods. W. Kern & Co AG, Sagemattstrasse 2, Liebefeld, Bern. WTD 5/31/57. I.R. 1. Wholesaler seeks canned foods, particularly shrimp, crab meat, tuna, sardines. Demaurex Freres, Denrees Coloniales en Gros, Route de> Lausanne 22-24, Morges (VD). I.R. 196. 201 Meat Products Meat importer seeks distributorship for packaged and canned dog and cat foods, hot sauces, relishes, ketchups, canned meat spe- cialties except tongue. Gunzburger AG, St. Johannvorstadt 90, Basel. I.R. 22. Coop wholesaler seeks lines of frozen, ready to cook chicken, turkeys, rock lobster tails, large shrimps, squid, frog legs, salnipn. WTD 12/8/60. I.R. 35.* Manufacturer/agent wishes to represent beef suppliers. John V. Fontannaz, 24, Petit Bel- laria. La Tour de Peilz. WTD 11/30/62. I.R. 5. 203 Canning, Preserving Foods Importer of food products with representa- tion in Switzerland and the Middle Bast seeks frozen foods, conserves, canned fruits and vegetables, jellies, jams, food specialties, fresh fruit and vegetables where prices are com- petitive. Fadco Sa, 15 rue du Jeu-de-1'Arc, Geneva. I.R. 224.* 207 Confectionery Importer desires chewing gum base for packaging under own name or to represent as exclusive agent. Also seeks packaged candies 1, 2, 5, and 10