Law made, deception found. In France, the AGEC law (Loi Anti-gaspillage pour une économie circulaire) also known as the “anti-waste law” enacted on Feb. 10, 2020, which prohibits the destruction of unsold goods, has turned into a gold mine for some fast fashion groups. An investigation by Disclose, in collaboration with Reporterre, revealed how Shein, Decathlon and Kiabi are taking advantage of this. So much for giving clothes a second life. Rather, giving them a second chance to make money.
The anti-waste law
The purpose of the AGEC law is to promote the circular economy by reducing waste and over production. But in reality, it’s achieving the opposite effect, generating contributions and putting charitable organizations, who do not know how to handle donations, in a bind. A multimillion-dollar business that has created the figure of the unsold goods broker, a mediator between large groups and charities. What is happening? The AGEC law provides for the creation of a 60% tax credit on the value of donated goods. Nss magazine cites the example: if Shein donates a pair of pants worth 12 euros to a charity, it receives a tax credit of 7.20 euros in return. So, by increasing unsold goods, the tax reductions increase and consequently the profit grow as well. According to Disclose’s reporters, Decathlon received 709,000 euro in tax credits in 2024 for 1.18 million euros of unsold goods donated.
What doesn’t add up
Huge “donations” end up flooding charities and recycling centers, overwhelmed by mountains of clothes. And what happens? That they are forced to destroy the products. Ultimately, with this law, the French state pays for more waste. Also according to the survey, fast fashion brands don’t even need to contact the organizations directly. They rely on a new figure, the unsold-goods broker. These are usually startup companies that stand between large fast fashion companies and charities, managing the relationships. So, the AGEC law not only benefits multinational corporations, but is slowly killing charities and thrift stores, which are major players for a circular economy.
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