Fast Fashion in the Crosshairs: Will France’s Proposed Law Shake the Industry?

2024-04-22

Morgane Benoist | Sustainability Consultant

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Fast fashion has taken over consumers’ closets, leveraging low prices and speed. However, this affordability often conceals serious issues such as environmental impact and workers’ rights violations. In this article, we discuss a proposed fast fashion regulation law in France and explore what this new regulation might mean for the global fashion market, including Japan.

Introduction

In 2019, the UN stated that the fashion industry alone was responsible for up to 8% of global carbon emissions. And the emissions keep increasing year on year. Why? Because we are consuming more and more clothing. Purchasing new clothing at a breakneck pace, all the while throwing away barely worn clothes to make space in our wardrobe.¹

Fast fashion brands are the perfect fuel for this buying spree: cheap clothes fitting the most current fashion trends, with new models on the rack (or virtual rack) every day to ensure consumers always have something to put in their basket. The environmental and social impact of fast fashion has been known for a while, whether about production or the destruction of clothing. Despite the extensive documentation, a lack of concrete regulations has meant that the only limit for fast fashion brands was their consumers’ wallets.

In March 2024, France decided to rectify this oversight: a law, pushed by France’s center-right party, Horizons, deputy Anne-Cecile Violland, aims to regulate fast fashion through 3 major measures:

A new requirement to “display messages” (to be defined later) informing consumers of the economic, social, health and environmental impact of fast fashion next to the retail price of the item on every page that allows purchase.
A fee of 5 euro from 2025, rising to 10 euro or 50% of the item retail price by 2030. The money gathered through this scheme would be used to finance recycling facilities outside the EU and favor companies complying with EU regulations
An advertisement ban for fast-fashion retailers, including influencer promotion.

The law is limited to fast fashion sellers and France’s national assembly has unanimously voted to adopt this law text. The Senate must also pass the text for it to formally become law, but if adopted what impact will it have? And how will that impact affect Japanese companies and consumers?

The limitations

Fashion manufacturers and retailers in France that do not have their own recycling process in place are already subject to an REP (Responsabilite Elargie des Producteurs), fee used to fund proper disposal at a piece of clothing’s end of life. This fee can be reduced if the manufacturer can prove their clothes are durable or include recycled materials. The new law’s proposed fee is intended to create similar market incentives in the ultra-fast fashion industry. It is envisioned in the future that the malus to be applied to ultra-fast fashion could turn into a bonus in the same way.

Although many of the details are intended to be clarified in a separate degree following adoption, the current text of the law has defined fast fashion very generally. The law text defines the targeted entities as those who put a certain number of clothes and/or accessories on sale within a set period of time. The “certain number” and “set period of time” have yet to be defined, but variations of the same piece are counted individually and duration of availability are set as contributing factors.

It is no secret that the law is targeting ultra-fast-fashion pure players such as Shein, Temu, and other similar platforms. The message display requirement, in particular, references websites with no mention of brick-and-mortar outlets. The law also explicitly targets influencer promotion, a method such platforms use extensively to target consumers under 30 years old. This form of promotion generally entails the platform sending free clothes to social media influencers with the understanding they will make a commission on every advertised piece sold.

But fast fashion is not limited to online platforms. Will traditional fast fashion EU retailers such as H&M or Zara (~36,000 pieces/year), or homegrown retailers like Kiabi (~15,000 pieces/year) or E.Leclerc be subject to the same restrictions as Shein? When comparing their yearly new piece output to Shein’s 7,200 pieces/day, the definition of “fast fashion” becomes a critical consideration.²

Regardless of where the designation is set, it is clear that an extra 5-10 € penalty for ultra-fast fashion articles would likely create significant impacts on consumer behavior. In 2021, low-priced clothes represented 70% of French consumers’ clothing purchases, with an average price point of 8.2 €. Should these costs be passed on directly to the consumer, the average price could increase anywhere from 60-120%.

The EU’s push for sustainable fashion

France’s new law doesn’t come as a surprise. Consumers’ have increasingly expressed concerns over the impact of fast fashion. In addition, the push for a more sustainable fashion industry is not limited to France. EU’s 2020 Circular Economy Action Plan and the EU Industrial Strategy both identify textiles as having “an urgent need and a strong potential for the transition to sustainable and circular production, consumption and business models.” To achieve its vision of a market full of long-lived, recyclable and environment-friendly clothing, in 2022 the EU released its Strategy for Sustainable and Circular Textiles, introducing several major requirements for the industry including:

Mandatory eco-design requirements to make sure clothing is environmentally friendly, reusable and recyclable
Mandatory disclosure of discarded and destroyed clothing, including bans on the destruction of unsold products
A Digital Product Passport and improved textile labelling, including mandatory disclosure of sustainability and circularity parameters
Limitations on the use of “green” or “eco-friendly” branding to describe clothing: these must be backed by EU-recognized or third-party certified labels.

On the consumer side, the EU has launched “RESet the Trend”, a campaign to raise awareness about sustainable fashion.

The Commission’s 2030 Vision for Textiles

– “Fast fashion is out of fashion” – consumers benefit longer from high quality textiles

– Profitable re-use and repair services are widely available

– In a competitive, resilient and innovative textile sector producers take responsibility for their products along the value chain

– Circular rather than throw-away clothes have become the norm, with sufficient capacities for recycling and minimal incineration and landfilling

What about Japan?

The Japanese market is highly comparable to France in terms of size and product lifecycle. If 798,000 tons of new clothes reached the Japanese market in 2022, more than 731,000 tons were thrown away. Out of those, only 35% ended up recycled or reused.³

The market differs, however, in terms of both corporate and consumer awareness regarding the societal impacts of fashion: in a 2022, METI survey, 30% of Japanese fashion retailers surveyed said there were no social issues they felt they had to address. More than 40% said they didn’t feel the need to disclose their CO2 emissions, water use or waste amount.

Despite this, Japan is moving, albeit slowly, in the right direction. In 2022, a working group of the long established leading political party, LDP, recommended the establishment of a Sustainable Fashion Promotion law to push the market in the right direction. In the proposal, the working group suggested promotion of greater transparency regarding CO2 emissions and more incentives for recycling and sustainable products. While these would be worthwhile advancements, the working group did not include any recommendation regarding reducing the number of new clothes entering the market. This was on purpose as to encourage producers, rather than impacting them negatively.⁴ In other words, a Japanese fast fashion tax, like what is proposed in France, is unlikely to happen in the near future.

This does not mean that Japanese companies can ignore the developments in France. Global Japanese fashion brands such as Uniqlo have presence in France and have been the subject of attacks by French NGOs over allegations of forced labor. Japanese companies doing business in France (or planning to) should recognize that consumer attitudes and regulatory landscapes are evolving rapidly, with sustainability becoming a central concern. In addition, while the French tax may be the first of its kind so far, the EU is well known for adopting similar policies to those of their member states, provided they show results.

Even if they do not operate in France or in the EU, Japanese fashion companies can and should proactively adopt environmental and socially friendly practices. In doing so, not only demonstrate a commitment to realizing a sustainable society, but also improve their brand image. Thus, allowing themselves to seize opportunities for differentiation and long-term growth on the global stage.