France targets Shein and Temu with fast fashion fees
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FILE PHOTO: A customer holds shopping bags with a Shein logo in the first physical space of online fast-fashion retailer Shein on the day of its opening inside the Le BHV Marais department store, the Bazar de l'Hotel de Ville, in Paris, France, November 5
By Dominique Patton and Helen Reid
PARIS, Sept 1 (Reuters) - France started imposing fees on the extreme end of fast fashion on Tuesday to try to curb a surge in sales of cheap clothing sold by e-commerce sites including Shein and Temu.
The charges – part of a fast-fashion law passed in June that aims to address environmental concerns from overproduction – range from €0.25 (30 U.S. cents) for a pair of boxer shorts or socks to €12 ($14) for a coat, with the amount capped at 50% of the product's pre-tax sales price.
"These platforms are false champions of consumer purchasing power. They sell at low prices, yet their products often fail to meet standards and lack durability," Commerce Minister Serge Papin told local newspaper Ouest France.
The fees add to Shein's difficulties as the end of duty-free access for cheap e-commerce parcels in the European Union and the U.S. caused the company's valuation to plunge ahead of its stock market debut in Hong Kong on Tuesday.
Neither Shein nor Temu responded to requests for comment on the fees. Shein's spokesperson in France, Quentin Ruffat, has previously said the fast-fashion charges would hurt customers by pushing prices up.
China's commerce ministry has described the French law as discriminatory and a trade barrier, saying it could be violating WTO principles.
FORMULA FOR FEES IS BASED ON VARIOUS FACTORS
The French fees, set to increase further from 2030, are calculated using a formula that takes into account the number of products available under a brand, their prices, and their repairability.
France is the first EU country to penalise retailers based on the number of items they offer on their website.
Shein's product selection included more than 2 million items as of March 31 this year, with 4,700 new apparel styles each day, according to its prospectus.
European retailers, such as Inditex's Zara and H&M, which offer a smaller range of products on their websites, are not expected to be impacted, according to a briefing by officials on Monday.
Under the EU textile Extended Producer Responsibility directive, all member states must introduce fees by April 17, 2028 that are collected from producers by an association to fund sorting, waste, and recycling of discarded clothing.
In France's case, the association, Refashion, will manage collection of the new charges and determine who is liable to pay them.
Some other member states have also already set up textile EPR associations, including the Netherlands. However its body, Stichting UPV Textiel, will collect fees from retailers based on the volume of clothing they sell in the country, not the size of their range, according to its website.
($1 = 0.8610 euros)
(Reporting by Dominique Patton and Helen Reid; editing by Barbara Lewis and Susan Fenton)
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