Destruction as Commitment: Burning Unsold Luxury Inventory and the Economics of a Ban

Models luxury brands' practice of destroying unsold inventory and the July 2026 EU prohibition on the practice. Argues that the causal arrow between "destruction the harm" and "prohibition the remedy" can run the other way: a forced ex-ante quantity commitment can reduce output and shift sales into off-price channels, and where brand value exceeds liquidation margins the destruction option can outperform prohibition. Predictions precede EU disclosure data; supporting evidence drawn from French market records (2022–2024).

@misc{2026_luxury_destruction_commitment,
  title  = {Destruction as Commitment: Burning Unsold Luxury Inventory and the Economics of a Ban},
  author = {Samir Varma},
  journal = {SSRN Working Paper},
  year   = {2026},
  doi    = {10.2139/ssrn.7169258},
  url    = {https://ssrn.com/abstract=7169258},
}