Italian authorities have launched an investigation into allegations of worker exploitation surrounding global luxury brands Christian Dior and Armani. The Italian Fair Trade Commission (AGCM) said in a statement on the day, “Workers employed by the two companies’ contractors were not paid proper wages, exceeded legal working hours, or had to work in inappropriate health and safety conditions. This is in contrast to the craftsmanship and excellent manufacturing technology that the two companies boast.”
They raided the workplaces of the two companies in Italy along with the financial police. The FTC believes that these companies’ exploitation of workers to produce products and promote their craftsmanship and quality constitutes a deceptive act of consumers.
“We will fully cooperate with the authorities’ investigation and believe the allegations are not valid,” Armani Group said in a statement. “We are confident of a positive result after the investigation.”
Earlier, a Milan court ordered a bag manufacturer owned by LVMH’s Dior Italian branch of LVMH to be supervised by law enforcement officers for one year on charges of neglecting labor exploitation by its subcontractors. Dior is one of LVMH’s major fashion brands. According to the court’s decision, four subcontractors hired illegal Chinese residents to operate their factories 24 hours a day. The bag was made at a cost of 53 euros, but Dior sold it at 2,600 euros at the store. It took nearly 50 times the original cost.
Armani also received a similar court sentence to Dior. It was found that Armani subcontractors paid 2-3 euros to workers who worked 10 hours, made bags, and sold them to Armani suppliers for 93 euros.
The supplier sold the bag it received back to Armani for 250 euros, which was sold at the store for 1800 euros.
The authorities plan to investigate not only whether the two companies violate labor laws, but also whether they have violated consumer protection laws in marketing and sales.
JENNIFER KIM
US ASIA JOURNAL
