Armani and Dior under investigation in Italy over slave labor allegations

Italy’s competition authority says it is investigating whether luxury brands Armani and Dior misled consumers, following probes by prosecutors into worker exploitation at suppliers to the two groups.

“In both cases, the companies may have made false statements about their ethics and social responsibility, in particular with regard to working conditions and compliance with the law by their suppliers,” the competition watchdog said on Wednesday (17).

He noted that companies “emphasized craftsmanship and quality.”

“However, to manufacture certain clothing items and accessories, the companies allegedly used supplies from workshops and factories that employed workers who were paid inadequate wages,” it added.

“In addition, such workers would be working hours above legal limits and in inadequate health and safety conditions, in contrast to the levels of production excellence on which companies pride themselves.”

Prosecutors in Milan discovered workshops on the outskirts of Italy’s fashion capital this year where poorly paid workers, often immigrants who were in the country illegally, produced leather bags and then sold them to Armani and Dior for a small fraction of the retail price.

They placed several Chinese-owned Italian suppliers to Dior and Armani under investigation, while also appointing commissioners to oversee the two groups’ units that outsourced handbag production to ensure they resolved their supply chain problems.

Dior, owned by French luxury giant LVMH, said it was cooperating with Italian authorities and would step up its checks on suppliers.

“No new orders will be placed in the future with these suppliers,” he said.

“Despite regular audits, these two suppliers have evidently managed to hide these practices,” he added.

Armani Group expressed confidence in a “positive outcome following the investigation [antitruste]”, saying in a statement that its companies were fully committed to cooperating with authorities and that it believed the allegations were without merit.

The antitrust authority on Tuesday carried out searches at Armani and Dior group companies targeted by its investigation, it said.

They were placed under investigation “for possible illicit conduct in the promotion and sale of clothing articles and accessories, in violation of the Consumer Code [italiano]”, he stated.

Violations of the consumer code in Italy generate fines ranging from 5,000 euros to 10 million euros.

Via News Agencies