France begins levying penalties on ultra-fast fashion giants

France has started enforcing financial penalties on the most extreme forms of fast fashion, a move aimed at curbing the environmental impact of cheap clothing sold by major e-commerce platforms like Shein and Temu. The fines, which took effect on Tuesday, are part of a broader law passed in June to address concerns over textile overproduction.

The penalties vary by product type, ranging from €0.25 for basic items like socks or boxer shorts to €12 for a coat. The charge is capped at 50% of the product's pre-tax price. The fee structure is calculated using a formula that considers the volume of items sold, their price points, and how repairable they are. These charges are set to increase further starting in 2030.

The new fees add to the mounting pressure on Shein, which is making its stock market debut in Hong Kong on Tuesday. The company's valuation has already been affected by the end of duty-free access for cheap e-commerce parcels in both the European Union and the United States. Neither Shein nor Temu responded to requests for comment on the new fees, though Shein's France spokesperson has previously warned that such penalties would push prices up for consumers.

China's commerce ministry has criticised the French law, calling it discriminatory and a potential trade barrier that may violate World Trade Organization principles.

According to its prospectus, Shein's product selection includes more than 2 million items, with around 4,700 new apparel styles added daily. By contrast, traditional European retailers like Zara and H&M, which offer a smaller range of products, are not expected to be significantly impacted by the new rules.

The penalties will be collected by France's Extended Producer Responsibility body, which is responsible for funding the collection, sorting, and recycling of discarded textiles, in line with EU regulations on textile waste.