Newsletter Buying & Production nr. 2, 2023

Sourcing

• Clothing companies look to reduce China manufacturing exposure  
• How Many Facilities Have Been Affected by Turkey’s Earthquake? Here’s What We Know 
• How prices have risen in fashion and textile production 

EPR

• UK Government delays introduction of EPR scheme for textiles
• EU Proposal for a Regulation on packaging and packaging waste
• Commission calls on FRANCE to ensure that its labelling requirements concerning waste sorting instructions comply with the principle of free movement of goods

CR Standards

• OEKO-TEX® ORGANIC COTTON - The new industry standard for organic cotton
• Climate and sustainability: how impending EU laws on ESG disclosures will be a matter of survival for Asian suppliers – South China Morning Post 
• AGEC Law France: A new FAQ document has been published by the French government

Sourcing
Clothing companies look to reduce China manufacturing exposure  
The Financial Times piblished february 18th an article on hat brands have begun to shift away from mass textile production in the country as they seek to reduce supply chain risks. Read more>>

How Many Facilities Have Been Affected by Turkey’s Earthquake? Here’s What We Know 
At least 9,210 apparel, footwear and textile manufacturers surround the epicenters of two powerful earthquakes that struck southeastern Turkey and northern Syria on Monday, killing more than 23,600 people and leaving hundreds of thousands homeless, writes Sourcing Journal.
The actual number could be higher. The Open Supply Hub, the open-source database formerly known as the Open Apparel Registry, hasn’t mapped every apparel supplier in the world, though it has made significant strides since it began collating previously disparate factory lists and standardizing name and address data in 2018. To date, it has leveraged data from hundreds of contributors to peg 90,000 garment and textile producers across 155 countries. Read more (notice you may need a login to read the complete article).

Fashion world responds to earthquake disaster 
The fashion world has begun responding to the earthquake disaster in southern Turkey and northern Syria where more than 11,200 people are now known to have been killed.Zara owner Inditex has donated €3 million (US$3.2m) to the Turkish Red Crescent organisation and 500,000 items of warm clothing for the humanitarian emergency."Our support will be used to cover basic needs, and we remain available to the main organisations working in the area if future demands arise," said an Inditex statement.The Turkish Red Crescent has deployed manpower and equipment to 10 affected provinces in south-eastern Turkey where 8,754 people have been confirmed dead. Another 2,470 lives had been lost over the border in Syria, at the time of publication.eanwhile, the H&M Foundation, the philanthropic arm of the Swedish fashion giant, is donating US$250,000 each to the Red Cross/Red Crescent and Save the Children to help earthquake victims. And the H&M Group is donating another US$100,000 to Turkey's Disaster and Emergency Management Authority (AFAD), as well as winter clothing to victims, reports Eco-Textile News. Read more (notice you may need a login to read the complete article)

How prices have risen in fashion and textile production 
The upswing in producer prices continues to weaken. In December, producers had to pay almost 22% more for the production of their goods than in the same period of the previous year, the Federal Statistical Office (Destatis) reports. This slowed down for the third time in Folge.Im November, with producer prices still 28.2% higher than in the same period of the previous year. In October it was +34.5%, in September and August +45.8%. In these two months, the absolute highs were recorded writes german trade magazine TextilWirtschaft.

In textiles, clothing, footwear and leather goods, textiles were the segment with the largest price increase. Companies had to pay 12.3% more in production. Above all, the costs of knitted fabrics rose sharply – namely by almost 19%. The production of textile textiles and yarns (+16.2%) was also significantly more expensive. However, the price increase was slightly stronger last month. It was 13% for textiles as a whole. Autumn 2022: Consumers have adjusted their fashion consumption. Their spending remained below the level of 2019. The analysis of HML Modemarkting in detail – with the ups and downs of all product groups. 
Clothing manufacturers were hit less hard. In this segment, the increase in November was just under 5% – a similar figure to October. The strongest increase was recorded for workwear and workwear (+10.9%). However, producer prices for laundry also rose by almost 7%. In shoe production, prices rose by almost 8%. For leather and leather goods, the figure remained unchanged at +7.1%. The development of energy continues to be the main reason for the year-on-year increase in industrial producer prices. Energy prices in December 2022 were on average 41.9% higher than in the same month last year. In addition, partly as a result of energy price increases, the costs of consumer goods, intermediate goods, consumer durables and capital goods also rose significantly. However, the slight decline in the producer price index compared with the previous month is also mainly due to the development of energy prices. Prices in the production of some foodstuffs – such as sugar (+72.1%), pork (+46.5%) as well as margarine and other dietary fats (+40.8%) – also rose sharply.

Highest annual average increase
Destatis also reports that average annual prices in 2022 are almost a third higher than in 2021. This was the largest measured change in the annual average since the beginning of the survey in 1949. In 2021, producer prices had risen by only 10.5% compared to 2020. The development of energy also had the greatest impact on the rate of change in producer prices on an annual average. On average, energy prices rose by more than 82% compared to the previous year, due to the extreme increases in natural gas and electricity. Excluding energy prices, the increase in 2022 was only 14%.

EPR 
UK Government delays introduction of EPR scheme for textiles 
The UK Government has said it does not expect an Extended Producer Responsibility (EPR) scheme for clothing and textiles to be introduced any time soon.Aconsultation on an EPR scheme for clothing and textiles was expected from the UK Government’s Department for Environment, Food and Rural Affairs by the end of 2022.The EPR is a strategy to add all of the environmental costs associated with a product throughout the product life cycle to the market price of that product. The UK Government, in its publication ‘Our Waste, Our Resources, A Strategy for England 2018’, committed to invoking the “polluter pay” principle and harness the potential of EPR. It identified five priority material streams for consideration under this commitment including textiles, reports Just-style.com (notice you may need a login to read the complete article).

Proposal for a Regulation on packaging and packaging waste
On 30 November 2022, the European Commission ('the Commission') published a proposal for a regulation aimed at reducing the negative environmental impact of packaging and packaging waste while improving the functioning of the internal market. To achieve this, the Commission is committed to further harmonising the conditions under which packaging may be placed on the market, including by setting requirements for markings, recyclability, reusability of packaging and phasing out 2 substances of concern and harmful substances. In addition, the proposal focuses on making the life cycle of packaging in the internal market more sustainable and circular, as well as on reducing the amount of packaging waste. The commitment to both reuse and recycling is essential. The Regulation also repeals the Packaging Directive (Directive 94/62/EC)1, and incorporates its content with the addition of new elements and in a new structure.

In general, the measures in the regulation can be summarised in three categories: the reduction of the amount of packaging, the recyclability of packaging and the harmonisation of the collection of used packaging. With regard to the category of reduction in the quantity of packaging, the Commission's proposal is to reduce the quantity of packaging by reducing unnecessary or excessive packaging and by encouraging and requiring reusable and refillable packaging. 

The Dutch government supports the proposed obligation for clear labels on packaging and waste bins so that it is clear where packaging should be thrown away, These labels indicate the composition of the packaging, whether the packaging can be returned to an intake system such as a deposit machine and what the corresponding waste container or material flow is.  The government also welcomes the provision of information via a QR code on reusable packaging, while paying attention to less digitally skilled citizens.

With regard to harmonising the collection of used packaging, the Commission proposal focuses on mandatory deposit return systems and harmonised markings of labels with information on the composition of the packaging including information on which waste stream it belongs in.

Article 11(5) requires the Commission to adopt implementing acts 18 months after the entry into force of the Regulation to establish a harmonised label and specifications for it.

First estimate of force field
In general, the proposal was presented by the Commission at the Environment Council on 20 December. positively received by a large number of Member States. However, some concerns were raised about the choice of the instrument of a regulation due to possible limited national flexibility for Member States and the intervention in the market when transforming the directive into a regulation. 
The European Parliament has not yet given its opinion on the proposal. The proposal will be examined by the European Parliament's Committee on the Environment, Public Health and Food Safety. Margrete Auken (Greens/European Free Alliance) has been appointed rapporteur. No shadow rapporteurs have yet been appointed. More information>>

MODINT will keep a finger on the pulse and will come back if there is news in this area.

Commission calls on FRANCE to ensure that its labelling requirements concerning waste sorting instructions comply with the principle of free movement of goods
Today, the European Commission decided to open an infringement procedure by sending a letter of formal notice to France (INFR(2022)4028) for failure to address its labelling requirements concerning waste sorting instructions. To be placed on the French market, household products belonging to an extended producer responsibility (EPR) scheme have to be materially labelled with the ‘Triman logo', signage informing that the product is the object of sorting rules, and the ‘infotri', information specifying the methods for sorting.

The provision of waste sorting instructions to consumers is currently not governed by harmonised EU rules. National laws adopted in this field shall not create unnecessary burden internal market trade. In this context, the imposition of national-specific labelling requirements risks undermining the principle of free movement of goods and can lead to counterproductive environmental effects. Such measures can also lead to increased material needs for additional labelling and additional waste produced due to larger than necessary sizes of the packaging.

The French authorities do not seem to have conducted a sufficient analysis of the proportionality of their policy choice as other suitable options, less restrictive of trade between Member States, are available. France is also in breach of the notification obligations under the Single Market Transparency Directive (Directive (EU) 2015/1535) to the extent that the law was not notified to the Commission at a draft stage, prior to adoption. France now has two months to address the concerns 

CR Standards
OEKO-TEX® ORGANIC COTTON - The new industry standard for organic cotton 
In April 2023, OEKO-TEX® will officially launch its new ORGANIC COTTON certification. It can be used for both finished goods and textile intermediates. Read more>>

Climate and sustainability: how impending EU laws on ESG disclosures will be a matter of survival for Asian suppliers – South China Morning Post 
Asian consumer goods suppliers to global brands should start strengthening their environment, social and governance (ESG) assessment and disclosure capabilities to stay competitive, according to an industry body. Impending regulations in the European Union, which is at the forefront on ESG legislation, will soon require tens of thousands of suppliers across the supply chain in Asia to report their ESG performance, said Amfori president Linda Kromjong, reports the South China Morning Post.

A new FAQ document has been published by the French government
Regarding the mentioning of recyclability on the product sheet:
A tolerance period in the controls will be applied, until 1 July 2023, for the transmission by the EPR eco-organisations of the calculation methods for recyclability. Manufacturers will have a maximum of 3 months from the date of transmission of the calculation methodology to implement this information in their "product sheets".

Note: Modint is checking with French organisations on how this applies to textile products.

Prohibited terms
The new version of the official guide on environmental claims, currently being drawn up by a working group of the Conseil National de la Consommation and to be published by the DGCCRF, may provide elements concerning the terms considered equivalent to "environmentally friendly" and "biodegradable". Click here to read the new FAQ‘s.