The French Leather Industry White Paper

Remove the levy cap to increase the performance of SMEs in the leather industry

This levy helps to increase the competitiveness of SMEs in the leather industry.

The industrial sector pays 60% of it with significant contributions from the major groups, with the other 40% coming from imports.

The funds collected are mainly used by SMEs to develop innovation and R&D programmes and improve their competitiveness.

This levy is used to:

• Adapt industrial expertise to ensure better quality skins, increase industrial performance, improve the design of finished products, ensure sustainable development, etc.
• Maintain, develop and transfer knowledge, carry out studies for the federations, and develop initial and vocational training programmes.
• Support the promotion of the leather industry by providing financial assistance to businesses to enable them to take part in national and international trade fairs.

Since 2012, this levy has been capped at 12.5 million euros. Any excess (€828,000 in 2014 and nearly 2 million euros in 2015) is paid to the French government. The cap was lowered to 12.25 million euros in France’s budget bill for 2016 (PLF 2016).

Capping this levy greatly penalises exports, particularly as it limits the ability of SMEs to participate in trade fairs abroad.

This situation limits the resources allocated to collective actions carried out for the benefit of SMEs and based on the four “I’s”: International, Investment, Innovation, Industry.

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The Conseil National du Cuir calls on the authorities to remove the levy cap to improve the performance of SMEs.

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Encourage business creation

The industry is made up of 8,000 businesses. The most innovative of these are growing thanks to breakthroughs made in R&D: improvement in the quality of skins, of production, new industrial processes, etc. Other SMEs are being created based on new, highly creative manufacturing concepts in line with trends.

The Conseil National du Cuir and the Fédération Française de la Chaussure (FFC - French Footwear Federation), with the support of CTC, joined forces to create the ‘ADC Au-Delà du Cuir’ association.

ADC’s aim is to encourage the emergence of new entrepreneurs and promote French creativity and craftsmanship.  ADC supports the development of young labels chosen for the innovative nature of their projects in the fields of footwear, leather goods, luggage and leather objects, by providing training programmes, coaching and financial assistance. ADC puts these new companies in contact with footwear and leather goods production sites all over France.

A guarantee fund financed at 50% by the Conseil National du Cuir and at 50% by the Fédération Française de la Chaussure has been created. This fund enables young entrepreneurs to accelerate their creative and economic growth, by facilitating their access to bank loans.

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The Conseil National du Cuir wishes to extend this support to a greater number of entrepreneurs and new business owners in the leather industry by developing the ‘ADC Au-Delà du Cuir’ programme.

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Encourage micro-business and SME succession

The industry is made up of artisans, micro-businesses and SMEs that work as subcontractors for larger companies because of their precious know-how. Gradually, these workshops and small businesses are disappearing with no one to take over their operation. As a result, companies are outsourcing their production abroad.

By being part of the industry’s value chain, these artisans, micro-businesses and SMEs help to promote France abroad.

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The Conseil National du Cuir would like to encourage SME and micro-business succession in order to secure the value chain, and to do so it is considering setting up a guarantee fund. 

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Support the fight against the counterfeiting of major brands to protect the Made in France label

Counterfeiting poses a considerable threat to the ‘Made in France’ label, particularly in the leather goods and footwear sectors. The leading luxury labels invest significant amounts to protect their designs and models.

The Conseil National du Cuir encourages and supports effective actions on the part of French customs authorities and the DGCCRF anti-fraud teams. It calls for greater monitoring and control in all European countries.

In France, counterfeiters are very present online but it is very difficult to prosecute them. French companies are faced with highly complex procedures such as having to draw up a notification in the language of the country where the counterfeiter is based, finding a bailiff in that country and serving papers to an address that is difficult to identify.

Canada and the USA have simple and effective procedures for dealing with counterfeiters, particularly over the internet, and they are successful at blocking sales.

French companies that manufacture leather products also face unfair competition due to the non-application of Decree n° 2010-29 of 8 January 2010 relating to products which are made in Europe or transit via a European country. This decree prohibits the use of the word leather for any material other than that obtained from an animal skin using a tanning process or an impregnation procedure that preserves the natural form of the skin fibres. However it is currently only applied to French companies.

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The Conseil National du Cuir calls for greater monitoring and control in all European countries. It would also like legal procedures to be simplified and for action to be taken as quickly as possible to limit the sale of counterfeit products over the internet.

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Secure the leather supply of big companies in the leather industry

Some 60 tanneries, 44 of which are industrial, generate a turnover of 430 million euros and employ 1,731 people.

Thanks to the expertise of these tanneries, French leather is highly sought-after by big companies in France and abroad. France is one of the global leaders for calf leather and exotic skins (crocodile, iguana, ostrich etc.).

Big companies have taken measures to secure their supplies in order to counter the shortage of raw materials and the inflationist tendency of the price of leather. Following the same logic as for the integration of manufacturing, companies and major groups such as Weston, Hermès, Vuitton and Kering have adopted an upstream production integration strategy to secure the availability of materials and know-how by buying up certain suppliers.

Recently, Hermès acquired Tanneries du Puy.

The CNC finds that these takeovers are beneficial for the industry and its activity. Jobs are saved, training programmes are created and skills and expertise are preserved.

The CNC would like to see these tanneries continue to collaborate with all their clients. It would also like for the improvements in production and skin quality to benefit all manufacturers, large and small.

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The Conseil National du Cuir encourages tanneries to preserve their specific production methods and urges them to maintain a diverse range of clients, as proof of their independence and their success.

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Reduce the taxes and costs imposed on shopkeepers and manufacturers of leather products and change retail legislation.

The difficult economic climate has weakened the retail sector, which has registered a 6% decrease in turnover since 2012, while overheads in that same time have continued to increase. Shop rents, indexed on the ICC (Construction Cost Index), have increased by an average of nearly 15% over the last five years to reach almost 14% of turnover (all taxes included), which is the equivalent of the wage bill. The Contribution Economique Territoriale (CET) business tax has increased by 30% on average for retailers and the tax burden is constantly increasing: the tax on commercial premises, TASCOM, has doubled, and local and environmental taxes are on the rise. The Conseil National du Cuir calls for these taxes to be reduced, as they are too heavy a burden on the retail sector.

The CNC is in favour of shops opening on Sundays, particularly in areas popular with tourists. There is a lot to be gained from this, as it would result in additional business growth and the creation of many thousands of jobs (around 20,000 full-time positions). Although progress in this area is still considered to be inadequate, the new bill for growth, activity and equal economic opportunities (known as the “loi Macron”) is a step in the right direction. The Conseil National du Cuir will pay close attention to the results this new bill produces.

As labour costs are too high in France, companies manufacturing labour-intensive leather items in France which are aimed at the lower end of the market are penalised by imports, particularly from Asia.

Lowering labour costs would help to partially offset this imbalance and limit mass imports from Asian countries. The CICE (tax credit to boost competitiveness and employment) is a positive first step in meeting the expectations of our businesses.

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The Conseil National du Cuir calls on the public authorities to take into account the specific characteristics of the leather industry when drawing up new legislative measures for businesses, and to reduce taxes and social contributions in order to allow French businesses to become more competitive.

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Develop initial training

Very often, the recruitment needs of leather companies are not being met. Two of the most significant challenges facing the industry are an ageing workforce and professions that hold little appeal for young people.

Passing on French know-how in the leather professions is absolutely vital for the industry’s development and its reputation. Our expertise is recognised worldwide and is a real plus for the big-name brands and the “Made in France” label. The leather industry thus has a strategic advantage that must be nurtured and passed on.

Initial training

There is a great need for trained workers, yet there are not enough young people undergoing initial training. Furthermore, the initial training programmes offered do not always match the current requirements of shoe and leather goods companies. Companies are looking for a level of skill that does not appear to be developed in some of the training programmes available.

The industry relies on a network of 165 schools in France preparing students for 63 qualifications (ranging from post-16 certificates to engineering degrees) across all sectors: leather goods, saddlery, shoemaking, shoe/boot repair, design/fashion, leather clothing, leather tanning, leather binding/gilding.

To make the leather professions more attractive to young people, CTC has forged partnerships with scientific, technological and fashion institutions – ITECH (a leather engineering school), Université de Savoie (sports engineering), Institut Colbert, and Institut Français de la Mode (IFM) – to enable students to discover the products and materials that are specific to the leather industry.

Make leather professions more attractive to young people

The Conseil National du Cuir is making efforts to improve the visibility of leather professions by taking part in job and training fairs open to the general public and aimed at promoting the professions and training programmes in the leather industry, as well as by sharing the experience of young industry talents on social networks and on our website.

The industry’s image problem is due to a lack of knowledge about the leather professions and to their poor drawing power.

The Conseil National du Cuir promotes the industry’s 100 professions and training programmes by participating in the career fair ‘L’Aventure des Métiers’, organised by Salon de l’Etudiant and held in November every year.

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The Conseil National du Cuir calls upon France’s Ministry for Education and the professional federations to work together to achieve a better distribution of training courses across the country and ensure these programmes meet the needs of businesses in the leather industry.

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Encourage vocational training

To solve these training issues, businesses have a long-standing commitment to the vocational training and continuing professional development of their staff. CTC offers training programmes adapted to each business.

To ensure the skills and expertise of the brands are preserved, CTC also conducts in-company training, a solution which improves the responsiveness of businesses.

A number of companies, including Repetto, Méphisto and Hermès, have created their own schools. In general, the training is delivered by CTC and these companies’ own in-house craftsmen and women.

OPCALIA is the accredited fund-collecting agency that contributes to financing these training programmes.

Support from local authorities

The French regional councils are in charge of vocational training and economic development in their regions and are gradually giving more support to leather companies. In Aquitaine, the regional council backed the creation of a centre of excellence for training in the leather professions, to meet the needs of companies not only within its own region but also in the neighbouring Poitou-Charentes and Limousin. These training programmes are aimed at jobseekers of all ages. The training centre is located within the vocational high school at Thiviers.

In the Franche-Comté region, a leathercraft training centre is supported by the Montbéliard local authority which encompasses Ecole Boudard and Lycée des Huisselets.

In the Aveyron region, the leather association Pôle Cuir Aveyron has just been formed on the initiative of local businesses. It is backed by the Aveyron Chamber of Commerce and Industry and the Millau Grands Causses Community of Communes.

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The Conseil National du Cuir would like to see the local authorities supporting the vocational training projects and initiatives of leather companies. 

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Environmentally-friendly production

Since the 1960s, the tanning sector in particular has implemented a sustainable development policy to limit the impact of its activities on the environment.

As tanneries use large amounts of water and treatment products, the sector has adopted environmental standards and developed environmentally-friendly technologies for:

• Waste management, including systems for sorting, disposal, and recycling
• Water protection with separated drainage networks and appropriate treatments
• Air protection with the development of aqueous formulas to reduce emissions.

Companies are subject to French and European legislation governing facilities classified for environmental protection (ICPE) and are audited by the DREAL regional bodies, as well as the Ministry for Work and Employment and various other government bodies.

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The Conseil National du Cuir encourages companies within the industry to innovate even further in their efforts to protect the environment.

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Ensure French leather poses no health risks to the consumer − a major concern for the industry 

French tanneries use only harmless substances such as chrome 3 or plant-based tanning agents. They adhere strictly to European standards for chemical substances:  dosage of water and volatile materials, levels of extractives, soluble materials and soluble mineral materials in leathers, levels of chloride ions to limit any impact on the health of consumers.
The French leather industry has issued best practice guidelines to avoid generating allergenic substances such as chrome 6, the use and sale of which has been prohibited for a number of years.

CTC performs checks using high-precision tools which allow them to measure the concentration levels of chemical substances even at a very low ppm (parts per million or mg per kg of leather).

In the footwear sector, a charter known as Innoshoe has been created by a group of manufacturers. The aim is to establish a methodological framework to ensure that the amount of chemicals used in their production poses no threat to the health of consumers. This demonstrates the leather industry’s commitment to consumer protection.

The situation is more complex for imported leather and leather goods. Imports by the French leather industry (all products combined) stood at 10.7 billion euros in 2015, up 10% from the previous year. Products from Asia/Oceania made up 50% of total imports.

All players in the French market, whether they are leather manufacturers, importers or distributors, are required to comply with European regulations (REACH). France is the only country in Europe to take samples from finished products in order to analyse them; this makes our country one of the safest for consumers.

French companies that import goods must adhere to very precise specifications.

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The Conseil National du Cuir encourages French companies to implement procedures to identify the traceability of any imported leathers and to ensure they are safe for consumers. 

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Develop best practices for breeding

France is the third largest global exporter of raw leather and one of the biggest producers of tanned calf leather.

Today, the industry is facing supply shortages, particularly for calf leather, the most sought-after material in the leather goods sector. There are three reasons for this: a drop in meat consumption (-4% per year), mechanical injuries to livestock (by barbed wire, for example), and the presence of a parasite, ringworm, which severely reduces the quality of the skin and makes it unsuitable for leather production.  Less than 20% of the skins bought from French farmers can be made into quality leather.

There is not enough raw material to meet the demand from the big luxury houses. In 25 years, the number of skins used has almost halved.

Good animal breeding and handling practices are also very important and improve the production and quality of the skins. The Syndicat Général des Cuirs et Peaux provides breeders and other upstream players in the industry with a handbook of best practices. It explains how to adapt herds to reduce the number of defects on the skins and also covers hygiene of premises, vaccination, anti-parasite treatments, and how to manage transport and slaughter conditions in the production chain of calf, young bovine and ovine hides.

Ringworm vaccination is also a way to increase skin quantity and quality. A pilot test carried out in 2012 showed that vaccinating animals against ringworm triples the amount of top-grade skins available. The production of quality skins could thus increase from 10% to 30%.

Norway, where vaccination was made compulsory in 1978, has eradicated ringworm from its territory.

Vaccination would also be economically advantageous for breeders, since the difference in weight between a ringworm-infected calf and a healthy one at the end of the fattening period is around 4kg per animal.

In addition, ringworm vaccination would also improve the animals’ quality of life by reducing the stress caused by itching.

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The Conseil National du Cuir encourages breeders and other upstream players in the industry to follow breeding best practices and vaccinate their livestock against ringworm to increase the production of top-grade skins.

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Promoting the leather industry is one of the priority actions of the Conseil National du Cuir

Although French leather companies are held in high regard by their French and foreign customers, consumers and economic decision-makers have very little awareness of the industry.

To increase the leather industry’s visibility, twice a year the Conseil National du Cuir organises Les Rencontres du Cuir, an event held in regions where leather in its many forms has generated significant economic resources as well as opportunities for employment and training.

It is organised on the premises of one of the industry’s flagship companies. Local elected officials and representatives of various institutions, the government and the region’s schools providing training in leatherwork, along with young people undergoing training are all invited, as are the regional and local media. Paraboot, Camille Fournet, Tanneries HAAS, the young micro-business Maltier le Malletier and the Pôle Cuir Aveyron association have already participated in these events.

To introduce people abroad to the excellence of French leather, representatives of the leather industry attended the international leather fair, APLF-MM&T, in Hong Kong in 2015, at a stand organised by the CNC to represent the Made in France label.

This initiative was echoed in France at the Révélations fair held in the Grand Palais in Paris where a large, high-quality audience was able to discover our manufacturers’ original and exceptional creations.

To attract young people to our professions, we must maintain an active and constant presence on social media: Facebook, Twitter, Instagram, with videos showcasing skill and expertise, and interviews with young people and industry professionals talking about the possible prospects and opportunities available.

Events such as Les Portes du Cuir in the Aquitaine region and Salon de l’Etudiant (a student fair) are  opportunities for the CNC to present all of our industry’s professions through live demonstrations by experts.

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The Conseil National du Cuir develops a number of marketing campaigns to raise awareness of this dynamic French industry that is truly representative of ‘Made in France’ quality.

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