Mario Peserico is worried. The sales director of Eberhard, a small Swiss watchmaker, is wondering who will provide his company with vital mechanical components that constitute the basis of the company'his products. “We have a problem here,” he says.

Behind Mr Peserico's concern is a decision by Swatch, the Biel-based company that is the world's largest watch producer, to stop supplying to other watchmakers in Switzerland with key components – part of a watch's “movement” – without which mechanical watches cannot function.