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Pen Gate
Montblanc Affair Could Smudge Lawmakers

Just before elections in 2009, 116 German lawmakers used up their remaining stationery budget to buying luxury Montblanc pens. Seven years on, a top German court will decide whether they can be named and shamed.

18.08.2016 | von Georg Weishaupt und Florian Kolf

Montblanc fountain pen nibs.

 

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It’s not exactly Watergate, but the “Montblanc affair” risks causing huge embarrassment to scores of German lawmakers.

Back in 2009, 116 German members of parliament ordered almost 400 luxury pens made by Montblanc worth some €70,000 ($79,000), shortly before the end of their parliamentary term. The ball-point pens and fountain pens were paid from the lawmakers’ stationery budgets.

Their transgression may seem minor by comparison with other abuse-of-office scandals — they purchased pricey pens at the taxpayer’s expense — but the case has been brewing for no less than seven years and is winding its way through the courts.

Sigmar Gabriel, the leader of the center-left Social Democratic Party, expressed outrage at the mini scandal, which made it onto the front page of best-selling newspaper Bild on Monday.

“Some politicians behave in a way that makes people shake their heads and ask themselves what are those guys up to,” Mr. Gabriel said. “They must be nuts.”

The stationery scandal stems from rules that say each member of parliament is entitled to spend up to €12,000 per year to equip their office. If they don’t spend that money, it’s gone for good — they can’t carry the entitlement over to the next year.

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As lawmakers rushed to spend their budgets in 2009, the sudden demand for upmarket writing equipment triggered suspicions that some parliamentarians wanted to get a nice memento of their Berlin days before possibly being voted out at the general election that year.

The president of the Bundestag, the lower house of parliament, Norbert Lammert, refused to name the offending lawmakers on the grounds that this would be an infringement of their personal rights. Bild newspaper filed a lawsuit years ago to gain access to the names. The Berlin administrative court recently ruled that the names of six lawmakers who had a particularly healthy appetite for pens must be released. But the Bundestag’s Council of Elders appealed against the ruling and the upper administrative court is expected to rule on the matter next week.

The furor has had two consequences so far. The former general secretary of Chancellor Angela Merkel’s Christian Democratic Union, Laurenz Meyer, has admitted that staff at his office ordered 14 Montblanc pens in 2009 — without his knowledge, he said. Secondly, parliament has now banned the purchase of Montblanc pens through the stationery budget.

Hamburg-based luxury firm Montblanc will presumably weather that decline in sales to lawmakers. In fact, the frequent mentions of the brand in the German press of late may actually boost its reputation. Its chief executive, Jérôme Lambert, declined to comment.

 

Jerome Lambert , chief executive of Montblanc.

 

But Walter Brecht, head of Cologne-based brand agency Spirit for Brands, said the brand’s evident popularity among politicians “confirms that Montblanc is a highly desired brand.”

Mr. Lambert, who became head of Montblanc three years ago, has striven to lessen the firm’s dependence on the writing instruments market but pens still account for 40 percent of its sales of €775 million. Watches and leather goods, however, are gaining ground, accounting for 25 percent of sales each.

With luxury pens, Montblanc’s core business, the brand is still comfortably positioned with a market share of 70 percent.

The firm was founded in 1906 as a fountain pen manufacturer by the Hamburg banker Alfred Nehemias and Berlin engineer August Eberstein. It innovated writing instruments by developing pens that had integrated inkwells.

The brand name Montblanc was devised a few years later when a relative of a business partner described the fountain pen as the summit of writing technology and likened it to the highest mountain of the Alps.

Most of its fountain pens are still manufactured by hand in the company’s Hamburg factory. Mr. Lambert has however ramped up production and brought out increasing numbers of special editions bearing the names of famous artists such as Andy Warhol, Pablo Picasso and opera star Luciano Pavarotti, which offer higher profit margins and account for around a third of writing instrument sales.

Mr. Lambert is particularly enamored of timepieces. The 47-year-old Frenchman spent almost 15 years at the watch brands of the Swiss Richemont group which owns Montblanc as well as Cartier.

“Our watch business has doubled in the past seven years,” Mr. Lambert recently told Handelsblatt in an interview. He declined to reveal a figure for watch revenues but confirmed that Montblanc sells 90,000 watches per year, and that the number has been steadily increasing.

The company is now among the 20 biggest watchmakers worldwide, he said. That’s not a mean feat in a market teeming with competitors ranging €2,000 to €20,000.

Georg Weishaupt covers fashion and luxury goods companies for Handelsblatt. Florian Kolf heads the trade and consumer goods desk. To contact the authors: weishaupt@handelsblatt.com, kolf@handelsblatt.com

 

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