European luxury towards 2,500 billion in 2030, but needs a boost from the EU

Nearly one thousand billion euros of turnover generated by European premium brands, equivalent to 5% of EU GDP and 11.5% of EU exports. And then two million employees, 410 billion euro contribution to the Union's Gross Value Added.

The report 'The Contribution of the High-End Cultural and Creative Sectors to the European Economy', produced by the European Alliance of High-End Cultural and Creative Industries (Eccia), of which Altagamma is one of the founding members, together with Bain&Co, presented in Brussels at the European Parliament on Wednesday 2 July, tells of a key sector for the European economy and for world luxury - it accounts for 70% of the sector, with a peak of 84% for automotive and 80% for luxury goods - that is experiencing decisive challenges at this historic moment. The intensification of geopolitical tensions contributes to aggravating instability, the potential increase in tariffs towards the United States and China's protectionist trade policies put at risk two key 'customers' that, together, absorb up to 40% of the entire value of the luxury market. And which could bring 350 million new 'decisive' consumers to the sector.

"This is the second edition of the report that we are presenting to the European Parliament, we think that the relationship with the EU is focal at this time and for our industry," explains Stefania Lazzaroni, CEO of Altagamma. "The numbers tell perfectly not only that the industry is relevant at the European level, but that it has a high potential. Just think that it invests up to 3% of its turnover in sustainability and up to 5% in training. However, the conditions must be in place for this potential to be realised: the upscale sector is perceived as being able to navigate on its own, but 80% of the companies that make it up are small and medium-sized enterprises in the supply chain that are currently experiencing many difficulties. There is therefore a need for targeted support action'.

In detail, between 2019 and 2024, the revenues of the European luxury industry rose by an average of 3% to EUR 986 billion, with peaks of 11% for yachting (worth EUR 9 billion) and 6% for personal goods (up to EUR 289 billion) and food (around EUR 36 billion). During this time, despite the pandemic, the sector created 160 thousand jobs, with a compound annual growth rate (CAGR) of 1.3%, compared to 0.7% for the labour market. The outlook, however, is different today: the latest estimates by Altagamma and Bain, released in mid-June, speak of a decline in the luxury personal goods market of between 2 and 5 per cent by 2025.

The challenge - to more than double the value of European luxury in five years from such a critical moment - is ambitious. And with this in mind, Eccia has brought to Brussels a series of recommendations related to the implementation of policies that, more or less directly, will support the sector: the strengthening of the Digital Service Act and the introduction of specific anti-counterfeiting legislation; the protection of the consumer experience and consumer trust through, for example, the fight against unauthorised sales; the promotion of sustainability in high-end goods and services while guaranteeing 36 months to adapt to the new obligations; supporting craftsmanship and skills development and, last but not least, strengthening trade and tourism by facilitating, for example, the issuing of visas.