France targets Shein and Temu with fast fashion fines

The penalties – part of a fast-fashion law passed in June that aims to address environmental concerns from overproduction – range from €0.25 (30 U.S. cents) for a pair of boxer shorts or socks to €12 ($14) for a coat, with the amount capped at 50% of the product's pre-tax sales price.

They add to Shein's difficulties as the end of duty-free access for cheap e-commerce parcels in the European Union and the U.S. caused its valuation to plunge ahead of its stock market debut in Hong Kong on Tuesday.

Neither Shein nor Temu responded to a request for comment on the fees. Shein's spokesperson in France, Quentin Ruffat, has previously said the fast-fashion penalties would hurt customers by pushing prices up.

China's commerce ministry has described the French law as discriminatory and a trade barrier, saying it could be violating WTO principles.

FORMULA FOR FEES IS BASED ON VARIOUS FACTORS

The French penalties, set to increase further from 2030, are calculated using a formula that takes into account the number of products sold, their prices, and their repairability.

Shein's product selection included more than 2 million items as of March 31 this year, with 4,700 new apparel styles each day, according to its prospectus.

European retailers, such as Inditex's ITX.MC Zara and H&M HMb.ST, which offer a smaller range of products on their websites, are not expected to be impacted, according to a briefing by officials on Monday.

Under European Union regulations on textile waste, member states must have an Extended Producer Responsibility body that collects fees from textile producers in order to fund the collection, sorting, and recycling of discarded clothes.

The French organisation set up to fund the collection and reuse of textiles in France will collect the new penalties from the importer or manufacturer of fast fashion that is liable for a penalty.

($1 = 0.8610 euros)

(Reporting by Dominique Patton and Helen Reid; editing by Barbara Lewis)