PARIS, March 4 (Reuters) - Fashion brands with ultra-fast product turnover such as China's Shein should be subject to penalties of up to 50% of their garments' selling price to offset their environmental impact, French ruling-majority MPs have proposed in a new bill.
The MPs say that ultra-fast fashion brands, rather than renewing their collections four times per year like traditional clothing brands, offer thousands of new products per day, inciting excessive spending and unnecessary pollution.
The bill singled out Chinese ready-to-wear company Shein, saying that it on average presents more than 7,200 new garment models a day, and makes more than 470,000 different products available to consumers.
To offset the environmental impact of ultra-fast fashion, the MPs propose penalties of up to 10 euros ($10.86) per item sold, or up to 50% of the selling price, by 2030.
Original article by Geert De Clercq and Mimosa Spencer; Editing by Sharon Singleton. 2024, March 5. France mulls penalties to rein in ultra-fast fashion brands. https://www.reuters.com/business/retail-consumer/france-mulls-penalties-rein-ultra-fast-fashion-brands-2024-03-04/
Where conversations around sustainability in the fashion industry have historically revolved around supply chain practices, a new proposal from France is shaking things up. The idea? A €10 tax per fast fashion garment.
While “sin taxes” aren't unheard of in other industries, applying them to fashion could be the start of a new trend. At first glance, it might seem drastic, but let's dig deeper into why this proposal might not be as outrageous as it sounds.
Observations:
- Top Pollutive Industries: Fashion ranks among the top pollutive industries globally, yet it often flies under the radar in terms of taxes and regulations. While consumers may not feel the direct impact of fashion's environmental footprint, the macro-level consequences are undeniable.
- Demand Always Wins: Despite efforts upstream to innovate materials and implement sustainability initiatives, fast fashion giants like TEMU and SHEIN show that demand ultimately dictates industry practices. Technology often outpaces regulation, leaving loopholes for unsustainable practices.
- Fast Fashion "Less Waste" Fallacy: While fast fashion brands claim "less waste" due to their quick turnover of garments, the reality is far from sustainable. Excess fabric and post-purchase waste contribute significantly to environmental destruction, with garments often ending up in landfills after just a few wears.
- Marketplace or Brand: The distinction between hyperfast fashion players as brands or marketplaces is blurred. SHEIN, for instance, releases ~9,000 new lines daily, resembling more of a marketplace model. This ambiguity raises questions about accountability in the industry.
- Geopolitics: Indeed, geopolitics casts a long shadow over the fashion industry, influencing everything from supply chains to consumer behavior.
France's proposal addresses many issues within the fashion industry - including sustainability, business models, geopolitics, supply chains, regulation, taxes, and consumer behavior. While debates continue over the pros and cons, landfills continue to overflow with discarded garments. If the industry struggles to self-regulate due to strong demand signals, perhaps a sin tax per garment isn't such a radical idea after all.
Moreover, linking this garment tax to a tiered tax incentive on the supply chain side could offer a comprehensive solution. By applying sustainability practices upstream, the tax credit could offset the garment tax at the point of purchase, effectively bridging supply and demand initiatives.
In conclusion, the proposed tax on fast fashion garments might be the wake-up call the industry needs to prioritize sustainability over consumerism. One thing remains clear: it's time for the fashion industry to rethink its practices and embrace a more responsible approach to production and consumption.
This article is featuring Michael Schindler’s observations related to dynamic pricing and sustainability. Michael Schindler (LinkedIn) is Pollen's Chief Operating Officer and has a long track record of leading teams, uncovering insights, and driving business results across US, EMEA, and APAC. At Pollen, he’s leading our business teams as well as directing overall company strategy and operations.
