Italian Competition Authority Investigates Armani And Dior Over Alleged Exploitation Of Workers

Italian Competition Authority Investigates Armani And Dior Over Alleged Exploitation Of Workers

Places them under investigation for unlawful conduct in promoting and selling products by breaching the Consumer Code

The Italian Competition Authority has stated that it is investigating luxury fashion groups Armani and Dior over the alleged exploitation of workers in their supply chain.

Recently, Milan prosecutors ordered that several Chinese-owned firms in Italy, producing luxury goods for Dior and Armani, should be placed under administration. It accused them of systematically abusing their employees.

The competition regulator alleged that Armani and Dior "emphasized the craftsmanship and the excellence of their workmanship" while relying on workshops employing people on inadequate salaries, working long hours and violating health and safety rules.

The probe focused on companies of the Armani Group and the LVMH-controlled Dior Group.

The antitrust agency stated, "The (Armani and Dior) companies may have made untrue ethical and social responsibility claims, particularly regarding working conditions and compliance with legality at their suppliers.”

It placed them under investigation "for possible unlawful conduct in the promotion and sale of articles and clothing accessories, breaching the (Italian) Consumer Code.”

Breaching the Code is punishable with 5,000 euros ($5,456) to 10 million euros ($10.91 million) fine.

In recent years, the luxury industry's supply chain has come under increased scrutiny by consumers and investors. To reduce risks to their reputation, fashion labels curtailed sub-contractors and began in-house production.

Last year, the competition authority that regulates consumer rights and unfair commercial practices, fined companies owned by fashion influencer Chiara Ferragni almost 1.1 million euros. It was for misleading charity claims on a Ferragni-branded Christmas cake.