Estonian traders not daunted by ban on destroying unsold clothing
A ban on selling unsold clothing and footwear will have little impact on Estonian retailers and manufacturers, as discounts generally help them sell nearly all their products.
Since July 19, large companies in the European Union have been prohibited from destroying new, unsold clothing, accessories and footwear. The ban stems from the EU's Ecodesign for Sustainable Products Regulation, which will also apply to medium-sized companies from 2030, while small and microenterprises are generally exempt.
Mihkel Krusberg, head of circularity and financing at the Ministry of Climate's circular economy department, told ERR that the regulation sets new requirements for almost all products sold on the EU market and that clothing, accessories and footwear may no longer simply be destroyed.
"Where possible, they must be sold, donated, repaired, prepared for reuse or recycled. The requirements apply to the company that places the product on the EU market or holds the unsold goods, regardless of whether it is a manufacturer, importer, wholesaler or retailer," Krusberg said.
Liina Männamaa, development and administration director at Kaubamaja AS, said the company has never destroyed its products.
"Clothing and footwear left unsold at Kaubamaja at the end of a season are sent to Leiupood where they can be purchased at significantly lower prices. We continue selling them there until the products are sold. Some of the remaining stock is also returned to suppliers," she explained.
Männamaa said the recently introduced regulation therefore does not directly change anything about Kaubamaja's operations, as the company has been following the same practices for years.
Producers try to avoid surpluses to begin with
Ruta Rannala, CEO of the Estonian Clothing and Textile Association, said the change will likewise have little impact on the association's members. Most are micro, small or medium-sized enterprises by European Union standards, with very few large companies. In addition, the association's members are predominantly export-oriented, manufacturing products for other brands based on specific orders rather than placing products on the market themselves.
Estonian companies that manufacture goods under their own brands also produce carefully calculated quantities for the market and continue selling them until the stock is gone. Rannala said she expects them to calculate and adjust their production runs even more precisely in the future to avoid accumulating excess inventory.
"The risks are greatest where millions of units are produced, with large volumes of rapidly changing products — what is commonly known as street fashion or fast fashion. We don't have manufacturers like that in Estonia," Rannala said.
She added that companies have already begun voluntarily and proactively addressing some of the issues covered by the regulation, such as digital product passports.
Rannala noted that the regulation considers anyone who places a product on the market under their own name to be a manufacturer, including companies that import textile products from non-EU countries. If such products are imported in vast quantities and cannot be sold within a reasonable period, those companies will need a strategy for handling them in the future. Rannala believes the EU will certainly scrutinize companies facing such higher risks.
"I wouldn't say that no one will encounter problems — I think some will, but I don't see them being significant for manufacturers," Rannala said, adding that she expects the regulation to have a more noticeable impact on importers.
Estonians consumers buy almost all discounted items
Estonia's positions on the regulation were discussed in 2022 when the Estonian Traders Association pointed out that destroying unsold products was very rare in Estonia's clothing wholesale and retail sectors. Instead, products are typically offered at progressively steeper discounts, resulting in Estonian consumers buying virtually all products placed on the market.
"Therefore, in the Estonian context, a ban on destroying unsold products is not problematic as long as they can still be sold at a discount," the association said.
When the regulation was being introduced, the Estonian Chamber of Commerce and Industry considered it essential that uniform ecodesign requirements apply throughout the EU's single market, avoiding a situation in which each member state had different requirements that would fragment the market.
Kaur Orgussaar, the chamber's head of communications and development, said the government generally took the chamber's feedback into account and that the chamber has not actively worked on the issue since then.
Mihkel Krusberg of the Ministry of Climate said the change has required retail and textile companies to review their inventory management, discount campaigns, handling of returns and donation and reuse arrangements.
"Although the change may bring additional costs and administrative burdens for businesses, it is also seen as an opportunity to develop circular business models, reduce overproduction and find new ways to use production surpluses," Krusberg said.
However, destroying unsold goods is not completely prohibited. Exceptions apply, for example, to hazardous or damaged goods, as well as counterfeit goods or products that infringe intellectual property rights and goods offered for donation but rejected by the donation system.
The ban on destroying unsold products is intended to help prevent overproduction and waste generation, which, according to the regulation's explanatory memorandum, have become widespread environmental problems. When goods are produced, transported and then destroyed without ever being used for their intended purpose, valuable economic resources are lost.
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Editor: Marcus Turovski
