Italian Authorities Launch Investigation into Armani and Dior for Alleged Worker Exploitation
Italy’s antitrust authority conducted raids on Tuesday at the establishments of both Armani and Dior conglomerates. The competition watchdog in Italy is currently looking into potential deception by the luxury brands Armani and Dior towards consumers, stemming from investigations by prosecutors into worker mistreatment at the suppliers of these two major groups.
Italian Authorities Launch Investigation into Armani and Dior for Alleged Worker Exploitation
The competition authority stated on Wednesday, “In both instances, these companies might have disseminated false information regarding their ethical standards and social responsibilities, particularly in relation to the working conditions and legal compliance of their suppliers.” The authority highlighted the emphasis placed by the companies on “craftsmanship and quality.”
The investigations raise concerns about potential ethical and legal violations within the supply chains of these renowned luxury brands, prompting a thorough examination to ensure transparency and accountability in their operations.
“Nevertheless, there are claims that certain articles and clothing accessories were produced by companies using materials sourced from workshops and factories that paid their workers low wages,” the statement continued.
“Furthermore, these workers were reported to be working long hours beyond legal limits and in substandard health and safety conditions, which starkly contrasts with the high production standards that these companies boast about.”
Recently, prosecutors in Milan discovered workshops on the outskirts of Italy’s fashion hub where underpaid workers, many of whom were undocumented immigrants, were manufacturing leather bags that were later sold to luxury brands like Armani and Dior for a fraction of their retail value.
In response to the investigation, multiple Chinese-owned Italian suppliers of Dior and Armani are being scrutinized, with commissioners being appointed to supervise the units responsible for outsourcing handbag production for both luxury brands. The aim is to address any supply chain issues that may exist.
Dior, under the umbrella of LVMH, has assured its cooperation with the Italian authorities and has pledged to enhance its monitoring of suppliers. The company has also declared that no further orders will be placed with the implicated suppliers. Despite conducting routine audits, Dior expressed surprise that the malpractices managed to remain concealed by these suppliers.
In a statement, the Armani Group expressed optimism about a favorable outcome from the ongoing antitrust investigation. They reassured that their companies were wholeheartedly cooperating with the authorities and firmly believed that the accusations were baseless.
Following the investigation, the antitrust authority conducted searches on Tuesday at the Armani and Dior groups’ premises, which were the focus of the probe.
The companies were under scrutiny for potential violations related to the marketing and sale of fashion items and accessories, contravening the Italian Consumer Code.
In Italy, breaches of the consumer code can lead to fines ranging from 5,000 euros to 10 million euros.
