Large Companies Can No Longer Destroy Clothing - Luxury After Excess

In 2018, the world learned that Burberry had destroyed 28.6 million pounds worth of its own products in a single year to protect the brand from discounting. The scandal forced the fashion house to stop. As of July 19, 2026, that practice is illegal throughout the European Union.

Credits Unsplash

Large companies may no longer destroy unsold clothing, clothing accessories, and footwear listed in Annex VII of the Ecodesign Regulation (EU 2024/1781, Article 25). Exemptions apply only in ten specific circumstances—and subject to conditions: those claiming they were unable to donate the products must have offered them to at least three EU social economy organizations or published the offer on their website for eight weeks. Under the regulation, recycling also counts as destruction. And above all: Starting March 2, 2027, large companies must report the quantity, weight, reasons, and destination of their waste using a standardized European format. Production waste will become public information.

To understand what is truly coming to an end, it’s worth looking not at fashion, but at the industry that has turned managed scarcity into an industrial model: diamonds. Debora Spar, writing in the *Journal of Economic Perspectives* (2006), describes the international diamond industry as perhaps the longest-lasting and most successful cartel in history: in the 20th century, De Beers came to coordinate a large portion of global sales of rough diamonds—at times more than 80%—through a centralized system of purchasing, stockpiling and controlled release, to prop up the price of a commodity that is anything but rare in nature. Contemporary luxury has refined this logic: Jean-Noël Kapferer calls it “abundant rarity” (Business Horizons, 2012) —Luxury grows by expanding access to more mainstream products, while reserving truly exclusive goods and experiences for the top tier, shielding abundance with symbolic and hierarchical rarity. And in some cases, the fashion industry has taken this a step further: eliminating excess to prevent it from reappearing in discount channels.

What financial statements don’t show is that managed scarcity has an environmental cost—on both sides. In the textile industry, according to the European Environment Agency, between 4% and 9% of products placed on the European market are destroyed before use—resulting in estimated emissions of up to 5.6 million metric tons of CO2, just below Sweden’s annual net emissions: pollution occurs twice—once during production and once during disposal. In the diamond industry, the environmental cost lies upstream. A study published in Humanities and Social Sciences Communications, a journal of Nature Portfolio (2024), cites industry estimates (Frost & Sullivan): extracting one carat results in 57 kilograms of greenhouse gases, 2.63 metric tons of mining waste, and nearly half a cubic meter of water; per metric ton of final product, emissions from diamond mining are double those of gold and 30,000 times those of iron ore. The scarcity managed in the mine and the scarcity restored in the incinerator are two versions of the same paradox: environmental capital consumed to sustain a price.

And this is where the parallel becomes a lesson, because the protection of downstream value is weakening in both sectors for different reasons. In the fashion industry, it has been limited by regulation, effective July 19, 2026. In the diamond industry, technology has stepped in, introducing a scalable substitute: lab-grown diamonds—chosen for 61% of the center stones in engagement rings surveyed by The Knot among American couples married in 2025—have made supply more flexible, whereas it was previously constrained by geology, and prices for natural diamonds bear the brunt of this shift.

For a century, protecting value by eliminating or limiting supply after creating the product has been a viable strategy: De Beers controlled the supply of diamonds, and the fashion industry eliminated excess. That model now faces three challengers: regulation, which eliminates certain methods of managing surplus and makes it public; technological substitution, which makes goods that were once tied to nature replicable; and environmental accounting, which incorporates previously external costs into value. For those reviewing financial statements, the consequence is clear: downstream correction is no longer an asset; it is a liability—a reputational one in textiles, a market one in diamonds. Rarity based on what production capacity cannot automatically replicate—expertise, provenance, time, identity, and creative control—becomes more resilient. Those who continue to overproduce will no longer be able to erase the error: they will have to repair it, repurpose it, declare it—or openly bear the cost.