Comment by digiown
11 days ago
Brand-name clothes is not really a commodity, and there is nothing efficient about destroying inventory (at scale, destroying small returns might be efficient). The brand name is a psychological trick that transforms commodity items into premium products, and supply control (destruction) seeks to gatekeep the brand and maintain that image. It works because the cost of the textiles is a small fraction of their retail price. It wouldn't work for example for things that cost more to produce, like electronics, which is why those are usually sold refurbished.
Supply control usually benefits the producers, despite what it may seem (destroying items). Increasing the supply lowers the relative pricing power of the vendors, and reduces the price an average consumer pays for the same item, even if the retail price for the item technically increases.
I'd say it is good in the long run. If people spent less on clothes, they'd have more to spend on other goods and services or invest in productive endeavors.
That’s not what will happen. You will not be seeing Chanel at the local discounter.
And for non-luxury brands this law will simply increase costs for companies operating in the EU and therefore cause people to spend more on clothes.
Parent painted a very logical sequence of events that concluded in reduced prices. Can you provide similar reasoning for why you believe this law will increase costs?