By Italy’s competition authority is investigating luxury brands Armani and Dior for potentially misleading consumers about their ethical and social responsibility practices. This follows inquiries by prosecutors into worker exploitation at the companies’ suppliers.
The watchdog suspects that Armani and Dior may have made false statements about their commitment to ethical working conditions and legal compliance by their suppliers. Despite emphasizing craftsmanship and quality, the companies allegedly used suppliers who paid inadequate wages and subjected workers to excessive hours and poor health and safety conditions.
Prosecutors in Milan discovered workshops where underpaid, often illegal immigrant workers produced leather bags for Armani and Dior at a fraction of their retail price. Several Chinese-owned Italian suppliers of the brands are under investigation, with commissioners appointed to oversee the units and address supply chain issues.
Dior, controlled by LVMH, is cooperating with authorities and plans to strengthen supplier checks, while Armani Group is confident in a positive outcome from the investigation. The antitrust authority conducted searches at the companies’ offices and is investigating potential breaches of the Italian Consumer Code, which could result in fines ranging from 5,000 to 10 million euros.
