France is home to the fashion industry’s most esteemed names and as of late last month, it is also on the brink of enacting one of the strongest laws when it comes to the handling of unsold garments and accessories. On the heels of revealing that it was working to draft legislation to ban companies from destroying certain unsold products, the French government has made good on its vow to “put in place in the [fashion and textile industries] the major principles of the fight against food waste in order to ensure that unsold materials are not thrown away or destroyed.”
Thanks to sweeping new legislation, called “Projet de loi relatif à la lutte contre le gaspillage et à l’économie circulaire” – or Bill on the fight against waste and the circular economy – French companies are slated to be subject to more than 100 new sustainability-centric provisions, such as those that require the systematic phasing out of automatic paper receipts and single use plastic in fast food restaurants, for instance; followed by the outright ban on all single-use plastics by 2040.
Of particular interest for the fashion industry is, of course, the prohibition on the destruction of an array of different types of unsold goods, including fashion items. To be exact, the law – which was formally approved by the French Sénat on January 30, and currently awaiting promulgation – aims to require “producers, importers and distributors, including e-commerce platforms, such as Amazon, to donate unsold non-food goods, save for those that pose a health or safety risk,” the Guardian reports.
The same law will implement a “polluter pays” clause, which requires companies to finance the destruction of waste that they create. This will require tobacco manufacturers, for example, to pay for the disposal of cigarette butts beginning next year, but is also expected to affect an array of other industries, as well.
Speaking of the new law, Paris-based attorney Céline Bondard says that it is aimed at reducing waste across sectors of the market, with some of the “more stringent measures emerging through a ban on the destruction of unsold products and the mandatory incorporation of a minimum level of recycled material into new products.” According to Bondard, in accordance with the law, companies can be penalized for destroying unsold products without sufficiently attempting to recycle or reuse the materials, and fines for failure to comply can reach up to €15,000 ($16,350).
The fashion industry is a particular target of the new legislation, as “apparel retailers, in particular, as they renew their products more frequently [than other industries] and often have surplus unsold stock,” according to French legislators. As a result of its longstanding practice of destroying unsold merchandise to avoid selling it at a discount and/or paying to store it, the industry, itself, is one of the biggest culprits in terms of the more than €650 million (nearly $710 million) worth of new consumer products that are destroyed or disposed of on an annual basis in France, and the $900 million more worth of unsold items going to landfills, according to Prime minister Édouard Philippe’s office.
Destruction of otherwise marketable products by brands has been a particularly popular topic of discussion in the wake of a number of brands coming under fire for such practices. In July 2018, Burberry revealed in its 2017/18 annual report that the “cost of finished goods physically destroyed in the year was $37.8 million,” that is up from the $35.6 million figure the brand cited for 2017. Swedish fast fashion giant, H&M, had previously made headlines for allegedly burning at least 60 tons of unworn apparel, while Richemont, the parent company to watchmakers Cartier, Piaget, Baume & Mercier, and Vacheron Constantin, among others, made headlines for “allegedly destroying its expensive, unsold watches.”
Still yet, Paris-based Louis Vuitton has – for years – been plagued with reports that it destroys unsold leather goods as part of a large-scale scheme to maintain its brand image, at least in part from the tarnishment that comes from the grey market and thus, the sale of its wares at unapproved prices by unaffiliated retailers.
Beyond efforts to save face, though, brands that import goods into the U.S. often resort to destroying unused products as a way to benefit from the “drawback” or the return of certain duties, internal and revenue taxes and certain fees collected upon the importation of products into the U.S., for instance, from France. In accordance with U.S. Customs and Border Protection program (and 19 USC § 1313, the section of U.S. Code, which centers on “drawback and refunds”), “If imported merchandise is unused and exported or destroyed under Customs supervision, 99 percent of the duties, taxes or fees paid on the merchandise by reason of importation may be recovered as drawback.”
The new legislation is awaiting promulgation.
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