"Companies may only destroy unsold clothes and shoes in limited cases, such as when items are unsafe or damaged, counterfeit or infringing intellectual property rights, or are rejected by charities or donation schemes."

Nike's unsold, defective, or returned shoes are ground up to make carpet padding. They're processed by the truckload in a large grinding machine.

It seems that under these rules, this would be illegal - ?

Yes, with the exception of ‘unsafe’ where a shoe is used and/or non-cosmetically defective.

The law reduces wasted production inputs — materials, energy, and labor — as well as production outputs — wearable shoes, here. This directly regulates a practice by brands where they destroy wearable clothing rather than see their latest branded fashion worn by people who bought it at a discount or received it for free. This also directly regulates corporations from using grinders, melters, incinerators, landfills, and overseas ‘recycling’ (=landfills) to replace warehouses with retailers, accelerate product cycle times and derive FOMO sales benefits without the cost of reducing their batch sizes. The apparel industry is destroying something like one third of what it produces, so it’s certainly earned regulation of its ‘this shall not be sold’ decisions to its disfavor.

I would expect Nike in the EU market to either increase product prices and/or decrease release intervals until their inventory supply is lowered to meet demand while claiming that it’s the EU’s fault that their hottest shoes aren’t yet available, rather than maintaining their existing cycle times and quantities by donating their wearable, branded, wealth-signaling shoes to be worn by poor people. (Perhaps that’s already begun?)

There is a lot more information about it here: https://environment.ec.europa.eu/strategy/circular-economy/e..., and the full (current) text being here: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A...

As far as I can tell (although I'm no lawyer, sorry Nike), the point is to reduce waste and to increase recycled content in use. With these two main objectives, what Nike is doing seem to be fitting within that. It's not the "destruction" itself that is bad, but what you do with that after the destruction, recycling it doesn't create waste (or maybe, as much waste) as outright destroying+throwing all of it.

Create a holding company and register some trademarked design. Apply said design to the product. License the design to the manufacturer.

When the manufacturer wants to destroy unsold stock - revoke the license to the design. You can now fully legally destroy unsold stock for "violating ip rights"

This seems kinda backwards, as far as I know charities and donation schemes are overwhelmed by clothing donations. Our problem isn't that we are destroying clothes that could be used somewhere else, the problems are manufacturing low quality clothing that lasts 2-3 wears, and fast fashion where people buy clothing for a specific event.

If they want to achieve their goals they should be aiming for demand destruction on _new_ clothes, once the clothes are unwanted it's too late.

But seems better to somehow incentivize fabric recycling and higher quality clothes. Even expensive clothes fall apart these days.

Isn't that recycling instead of destroying?

I guess it comes down to if that is considered recycling. I'd personally consider it such, but not sure what the legal definitions will be.