Italian authorities have launched an investigation into labor exploitation allegations against French luxury brand Christian Dior and Italian luxury brand Armani.
Dior was accused of employing illegal Chinese immigrants and forcing them to work 24 hours
On July 17, ANSA reported that the Italian Competition Authority (AGCM) issued a statement saying it had raided the business premises of both companies in Italy the previous day, together with financial police.
The AGCM pointed out, “Workers employed by the two companies’ contractors had to work in inadequate health and safety conditions, either without receiving a fair wage or exceeding legal working hours. This contrasts with both companies’ craftsmanship and superior manufacturing techniques.”
On July 10, the Milan Court ordered a bag manufacturing company of Dior’s Italian branch to be supervised by a judicial administrator for a year on charges of neglecting the subcontractor’s labor exploitation.
According to the court decision, four subcontractors employed illegal Chinese immigrants to produce bags without a day off for 24 hours. The cost of the bags produced this way was only 53 Euros (about $58), but Dior sold them in stores for 2600 Euros (about $2,887).
About the AGCM investigation, Dior stated in a release, “We will cooperate with the authorities’ investigation,” and “We have ceased cooperation with suppliers found to engage in illegal practices and are strengthening checks on other suppliers.”
Armani also made workers work 10 hours and paid them 2 to 3 Euros
In April, Armani faced a similar court ruling.
A subcontractor for Armani employed workers for 10 hours a day and paid them 2-3 Euros (about $2-3) to manufacture bags. These bags were sold to Armani’s supplier for 93 Euros (about $100).
The supplier then resold the bags to Armani for 250 Euros (about $277), and they eventually retailed in stores for 1800 Euros (about $2,000).
In response to the allegations, Armani stated, “We will fully cooperate with the authorities’ investigation and believe that the allegations are invalid. We are confident of a positive outcome after the investigation.”
In response, the Financial Times (FT) of the U.K. stated, “This investigation is a significant blow to luxury brands that have maintained their reputation by promoting that French and Italian artisans manufacture their products with high skill levels.”
