Europe’s sourcing reset: independence, but at what price?
Drivers reshaping the European sourcing debate
Europe’s industrial climate remains bruising: EURATEX reports EU manufacturing capacity utilisation fell below 80 percent by end‑2024 and stresses that energy prices remain high relative to major competitors, while geopolitical uncertainty and trade tensions further complicate investment decisions. Freight volatility has reinforced the “distance penalty.” UNCTAD attributes renewed swings in shipping costs to disruptions on major routes including the Red Sea/Suez and the Panama Canal, where rerouting, higher fuel consumption and rising insurance premiums amplify uncertainty. Regulation is tightening expectations in parallel: the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) entered into force on 25 July 2024 and requires in-scope companies to identify and address adverse human-rights and environmental impacts across their operations, subsidiaries and relevant business partners in value chains; meanwhile CBAM entered its definitive regime on 1 January 2026 for selected carbon‑intensive imports (including cement, iron and steel, aluminium, fertilisers, electricity and hydrogen), reinforcing scrutiny of embedded emissions upstream of finished products.
Commercial trade-offs and sectoral fit
Nearshoring/reshoring can compress lead times and make development, sampling and quality management easier, but it competes with Europe’s structural cost base, particularly when energy and compliance costs are elevated. As a result, Europe tends to be commercially easiest to justify where margin and risk justify proximity: premium goods, technically demanding products, and accessories where workmanship, materials handling and rapid iteration can protect brand equity. For high‑volume, price-led basics, offshore sourcing often remains hard to displace because scale and unit economics still dominate; McKinsey notes nearshoring has been a top executive priority since 2016, yet the industry’s nearshoring footprint has not meaningfully expanded, an indicator that cost and capacity constraints still bite.
The pragmatic answer: dual sourcing with hard benchmarks
The emerging “middle path” is hybrid: keep core, forecastable volume in cost-efficient regions while building a near/Europe lane for fast-turn capsules and replenishment. McKinsey explicitly describes “dual or multicountry sourcing” as a response to volatility and the push for speed and flexibility. Market tracking points in the same direction: QIMA reports strong 2025 inspection growth in Mediterranean nearshore hubs (including Egypt, Tunisia and Morocco), while CBI expects Türkiye and Eastern Europe to benefit as European buyers seek proximity. Buyers assessing whether “independence” is wise should benchmark decisions consistently using total landed cost (including volatility buffers), lead-time certainty (not best case), MOQ and replenishment flexibility, compliance/documentation readiness, and development speed from sampling to bulk.
Illustrative European options
Against this backdrop, several concrete European sourcing options illustrate how proximity can translate into practice. In accessories, factory Belt Fashion (part of HVEG Accessories Group) is one European/local option: it states it produces belts in its Dutch factory with naturally tanned leather from Europe and cites Leather Working Group membership plus social-audit credentials (BSCI rating; Sedex and ICS audits). Beyond a single supplier, choices often map to regional strengths: Italy’s leather goods ecosystem (Assopellettieri notes almost half of Italian leather goods manufacturers are concentrated in Tuscany), Portugal’s knitwear capacity (ATP’s industry statistics separately track “knitted and crocheted” fabrics as well as “knitted and crocheted” apparel), and nearshoring lanes in Türkiye and Eastern Europe that balance speed-to-market with cost control.