Amazon blames destruction of goods on VAT rules

Amazon is fighting back against the reproaches they received concerning the destruction of millions of unsold goods. The French VAT regulation forces them and their suppliers to destroy the items, the company says.

“Small portion of unsold goods”

A popular and much-discussed TV report, viewed by four million people, revealed last weekend that Amazon destroys large amounts of unsold products. In one of Amazon’s smallest French distribution centres alone, 293,000 euros worth of unused items were destroyed in nine months.

Amazon France has responded to the controversy and the criticisms that followed in the wake of these revelations. In a series of tweets, the e-commerce giant fights back, claiming that only a small portion of unsold products ends up destroyed. They also say that the current VAT regulation makes it unfeasible to give away more goods: “The vast majority [of unsold products] is recycled, resold, sent back or donated. We regularly make donations to organisations such as ‘Dons Solidaires’ or the food banks,” they tweeted. “We take pains to limit the amount of products for which we have no other choice than to destroy them, in particular by addressing the issue in our conversations with the authorities.”

VAT rules for donations “not viable”

The products that are destroyed mostly come from external suppliers, who offer their wares on the marketplace but use Amazon to stock and send the products from its distribution centres. The trade agreement between both parties clearly states that unsold goods have to be accepted back by the supplier or destroyed by Amazon.

For most suppliers, taking back the items is not possible due to a lack of space or prohibitive costs. Amazon also explained on Twitter why they do not donate more to charities: “Current VAT rules force sellers to pay the VAT on donations themselves, which is not viable economically.” Earlier, French Minister of Environment Brune Poirson responded to the programme by stating that a legal proposition is in the works to enforce a more circular economy. The new law should make the destruction of consumable goods illegal.