PARIS — The European luxury sector will continue to grow at a rate of between 7 and 9 percent a year, provided that changes in European Union laws do not undermine its potential, representatives of European luxury goods makers said Tuesday.
Medium-term forecasts suggest that, by 2020, the sector will contribute 790 billion to 930 billion euros, or $983 billion to $1.1 trillion, to the European economy, according to a study commissioned by the European Cultural and Creative Industries Alliance, or ECCIA, which groups Europe’s main luxury groups.
Speaking at the launch of the report in Brussels, European Commission vice president Antonio Tajani said it was crucial to establish the right framework to ensure the region’s competitiveness.
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“My services are going to commission a study on the European luxury sector and will put forward policy recommendations before the end of the year,” he added.
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Among the main threats to luxury sales are the growth in counterfeiting and any changes in rules governing selective distribution that would restrict the ability of brands to control the distribution and sale of their products and services, the study conducted for the ECCIA by economic consultancy Frontier Economics found.
“While cost impacts may be less important than in other sectors, their effects are still substantial, and there is a constant need to ensure that regulations aimed primarily at the mass market do not undermine the aura of luxury that is such an essential feature of the luxury business model,” it said.
The luxury sector represents 3 percent of Europe’s gross domestic product, with a total output of more than 440 billion euros, or $547 billion, according to ECCIA estimates.
The sector employs about one million workers directly and at least another 500,000 indirectly, and has the potential to raise this total to 2.2 million people by 2020, it added. “The commission’s initiative is hence essential for the industry to achieve its potential,” ECCIA president Armando Branchini stated.
The ECCIA is made up of France’s Comité Colbert; Italy’s Fondazione Altagamma; the U.K.’s Walpole British Luxury; Spain’s Circulo Fortuny, and Germany’s Meisterkreis.