The EU Just Banned Luxury Brands From Burning Unsold Stock. Here's the Catch.

Industry analysis · July 2026

On July 19, 2026, something changed that the luxury industry had spent decades avoiding: it became illegal, across the entire European Union, for large fashion companies to burn, shred, or landfill their unsold stock. LVMH, Prada, Chanel, and dozens of others now have to find another way to deal with the coats, bags, and shoes nobody bought this season.

Here's the part that should catch the attention of anyone who buys or sells pre-loved luxury: the new rules still let brands destroy one specific category of goods without asking anyone's permission first. Counterfeits.

That single carve-out is really the whole story. Regulators just spent years closing off every excuse a luxury house had for quietly making stock disappear, except the one reserved for fakes. If lawmakers treat "is it real" as the line that decides whether something gets a second life or gets destroyed, it's worth asking how carefully anyone else is checking that same line before an item changes hands.

In this article:

1. Why would anyone destroy something worth millions?
2. The receipts: three brands, three wake-up calls
3. How the law finally caught up
4. The one exception regulators kept
5. Where does the stock go now?
6. What this means if you buy or sell secondhand

1. Why would anyone destroy something worth millions?

Destroying good stock looks irrational until you remember what luxury actually sells: scarcity. A logo only carries a premium if not everyone can casually get one at a discount. Once markdown racks and outlet malls fill up with last season's product, the brand's core promise (that this costs what it costs because there isn't much of it) starts to look shaky.

There's also a "grey market" problem specific to watches and hard luxury. Brands sell through networks of authorized boutiques and department stores. When a retailer can't move stock, the usual next step is a quiet discount, a sale to a liquidator, or a slow drift into unauthorized resellers who then undercut the brand's own full-price stores. For decades, the cheapest way for a brand to avoid all of that was to buy the unsold stock back and get rid of it: recycling the raw materials, but never letting the finished product reach a customer at any price.

None of this was hidden. It sat in annual reports as a normal cost line, and for years nobody outside the industry paid it much attention. Then three cases made it impossible to ignore.

2. The receipts: three brands, three wake-up calls

Burberry and Richemont's numbers made headlines in 2018 for the same reason: both practices were completely legal, and both looked terrible next to a brand's sustainability messaging. Chanel's case, surfacing years later in court, showed the practice hadn't disappeared. It had just gone quiet.

3. How the law finally caught up

France moved first. Law n° 2020-105 of February 10, 2020 (the AGEC law) made France the first country to ban destroying unsold non-food goods outright. The rule arrived in two stages: clothing and footwear were covered starting January 2022, while leather goods and accessories, the categories that matter most to luxury houses, weren't required to comply until the end of 2023.

The EU has now scaled the same principle up to all 27 member states. Under Regulation (EU) 2024/1781 (the Ecodesign for Sustainable Products Regulation), any company above 250 employees or €50 million in yearly turnover is barred from sending unsold clothing, accessories, footwear, or customer returns to incineration or landfill. Medium-sized companies get more time; the same restriction extends to them from 2030.

4. The one exception regulators kept

The EU didn't ban destruction outright. A companion regulation, Delegated Regulation (EU) 2026/296, spells out exactly when a brand can still legally destroy stock instead of reselling, donating, or recycling it.

Read that list again. Even a regulation built specifically to stop brands from erasing perfectly good product still assumes that fakes get pulled and destroyed: no discount rack, no donation bin, no second chance. Regulators drew exactly the line that matters: authentic stock gets a second life, counterfeit stock doesn't get one at all.

The catch is that this sorting has to happen somewhere. Inside a brand, quality control and legal teams handle it before goods ever reach a store. But once an item leaves the brand's hands, whether through an outlet, a resale platform, a private seller, or three owners down the line, nobody is doing that sorting for the buyer anymore. That's the exact gap independent authentication exists to close.

5. Where does the stock go now?

Selling less-than-full-price stock isn't new for luxury brands. Outlet villages and private sample sales have existed for years. What's new is the scale. With incineration and landfill off the table, brands that would once have quietly destroyed six or seven figures of stock now have a strong financial incentive to push more of it into resale, outlet, and donation channels instead.

That lines up with a market that was already growing fast. The global luxury resale market is on track to grow from roughly $38 billion in 2025 to about $41.6 billion in 2026, and toward $60 billion by 2030: a compound annual growth rate near 10%, according to Research and Markets.

More volume is good news for anyone hunting a deal. It's also exactly the environment where fakes travel best. As we've covered in our report on the global counterfeit crisis, resale platforms already can't physically inspect every listing at the scale they operate at, and counterfeiters know that a steep discount now comes with a perfectly legitimate-sounding cover story: "it's just overstock the brand would otherwise have destroyed." That story is often true. It just isn't something you can verify by looking at a photo.

6. What this means if you buy or sell secondhand

• A steep discount isn't proof of anything. Legitimate brand overstock and a well-told counterfeit story can look identical in a listing. Get anything you can't personally inspect authenticated before you pay, not after.
• Buyers already expect a certificate. More than 6 in 10 European buyers of secondhand luxury say they specifically seek out sellers who provide a digital certificate of authenticity.
• Sellers benefit just as much as buyers. An authentication certificate doesn't just protect the person paying; it typically helps items sell faster and for more, because it removes the buyer's biggest hesitation.
• The paper trail thins out fast. Brands may now be more careful stewards of their own surplus, but nothing forces the next three owners of an item to keep proving what it is. A certificate is what carries that trust forward.

Sources & references

• Retail Gazette, Luxury retailers face stock squeeze as EU destruction ban takes effect (2026)
• EU Today, EU ban on destroying unsold clothing forces fashion groups to rethink excess stock (2026)
• Chain Store Age, EU's ban on destruction of unsold clothing, shoes takes effect (2026)
• Osborne Clarke, Prohibition on the destruction of unsold non-food products
• Fashion Law Journal, Deadstock Destruction: Why Fashion Keeps Destroying Unsold Goods
• Quartz, Why Richemont is destroying unsold Cartier and Piaget watches (2018)
• OECD / EUIPO, Mapping Global Trade in Fakes 2025
• Research and Markets, Luxury Resale Market Report 2026
• Legitique, The Global Counterfeit Crisis: What Every Luxury Buyer Needs to Know in 2026