Legal: Customs & Antitrust Guidance
The Price Parity Toolkit (PPT) aims to close the price gap between next-gen and conventional materials in the fashion industry. For effective and compliant implementation, brands should consider both Customs and Antitrust Guidance.
These guidelines help brands navigate international trade and competition laws, ensuring the shift to lower-impact materials isn’t hindered by hidden costs or legal risks. Customs Guidance clarifies how fee structures affect customs valuation, while Antitrust Guidance ensures fair collaboration and prevents anti-competitive behaviour, creating a transparent, competitive foundation for scaling sustainable materials.
For comprehensive findings and detailed implementation guidance, refer to the extended Customs and Antitrust Annex.
Customs Guidance
Navigating EU customs duties* is an important factor when implementing the PPT mechanism for garments containing next-gen materials. The Transaction Value, the price paid for goods exported to the EU, is the primary basis for customs valuation, but certain fees may be added.
Key Findings:
- Inclusion Rule: Volume-based fees on garments or materials are seen as a condition of sale and should be included in customs value.
- Separation Rule: To exclude a fee, it should be clearly separate from the product price, non-volume-based, not performed by the seller, and not linked to the goods.
- Product Fee: Simple to apply but raises customs value and import duties (however, if a 0% import duty rate applies, the impact is minimal.)
- Service Fees: Structuring non-volume-based service fees (e.g., R&D, Traceability, Supply Chain Engagement, Licensing) offers a chance for exclusion.
- Documentation: it is advised that records are kept for seven years, including service agreements, calculations, import docs, and correspondence. Legally drafted contracts are essential.
*This document focuses on the current European Union (EU) and Dutch customs legislation regarding the valuation of imported goods. If your operations extend outside the EU, please ensure you seek relevant local customs guidance. FFG will be expanding this guidance in upcoming iterations.
Antitrust Guidance
To ensure the PPT mechanism encourages sustainable innovation without hindering competition, antitrust compliance is crucial. It is important to establish clear boundaries for collaboration between brands and suppliers to mitigate potential risks.
General Rules:
- Don’t share commercially sensitive information.
- Pricing guidance may set maximum but not fixed resale prices.
- Avoid exclusivity or non-compete clauses.
- Select innovators and suppliers transparently and objectively.
- Legal advice might be needed for brand collaborations.
Tier-Specific Risks:
- Brands (Tier 0): Avoid collusion, price fixing, or market sharing. Keep the PPT open to new participants and ensure pricing freedom on final products.
- Innovators & Fibre Producers (Tier 4/5): Avoid resale price controls, exclusivity, or boycotts; ensure fair downstream pricing and open access.
- Supply Chain Partners (Tiers 3–1): Apply similar principles, no exclusivity, fair pricing, objective partner selection, and brand autonomy in choosing partners.
- Anti-trust guidelines typically discourage exclusivity. However, given the unique market conditions of next-generation materials, short-term, sourcing-limited exclusivity within the PPT may be permissible, provided specific market share conditions are met.
Other Projects
Behind the Break
In early 2024, Fashion for Good and The Microfibre Consortium joined forces on “Behind the Break: Exploring Fibre Fragmentation”, a collaborative project designed to advance the industry’s understanding of fibre fragmentation. Although fibre fragmentation is an issue that spans multiple industries, this project specifically focuses on the textile and fashion value chain, aligning with the missions of Fashion for Good and its partners to drive systemic change towards a more sustainable industry.
Future Forward Factories
The “Future Forward Factories” project, initiated by Fashion for Good, focuses on transforming tier 2 processing in the textile industry through innovative low-impact, decarbonisation solutions. It aims to generate actionable blueprints for factories of the future that combine renewable energy and technology upgradation including mostly dry processing innovations. These blueprints take into account the macro geographical factors that are customised for every product to achieve next-zero facilities with a strong return on investment. The blueprint also takes into account the Just Transition lens to ensure that the transitioning from a conventional to Future Forward Factories is inclusive and people-centric.
World of Waste
World of Waste is an online tool dedicated to uniting industry-wide efforts to develop and disseminate data on textile waste. The platform consolidates data from individual studies by partnering with ecosystem players.
