Labour exploitation

Antitrust, investigation on Armani and Dior: emphasis on craftsmanship harms consumers

According to the Authority, the companies - already involved in an investigation by the Milan Public Prosecutor's Office - would have emphasised the craftsmanship of their creations, which were however made in workshops employing exploited workers. Hence the damage to consumers

17 July 2024

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Key points

The investigation initiated by Agcm
Investigations by the Milan Public Prosecution Service
Armani's response: "Unfounded assumptions, but we cooperate"
Dior: "We condemn acts of the two suppliers. Relations broken"

4' min read

The Antitrust opened an investigation against some companies of the Group Armani and of the Dior Group for possible unlawful conduct in the promotion and sale of clothing, in violation of the rules of the Consumer Code.

According to the Authority, in some cases, companies would use supplies from laboratories employing workers who would receive inadequate wages. In addition, they would operate working hours beyond the legal limits and in insufficient health and safety conditions, in contrast to the vaunted levels of production excellence.

On 16 July 2024, the officials of the Authority, with the assistance of the Special Antitrust Unit of the Guardia di Finanza, carried out inspections at the premises of the companies Giorgio Armani S.p.A. and G.A. Operations S.p.A. and also at the offices of the company Christian Dior Italia S.r.l.

The investigation initiated by the Agcm

The companies allegedly emphasised craftsmanship and excellence of workmanship. Against these claims, the companies would use supplies from workshops and factories employing workers who would receive inadequate wages to produce certain articles and clothing accessories. In addition, they would work hours beyond the legal limits and in insufficient health and safety conditions, contrary to the levels of excellence of production boasted by the companies.

Investigations by the Milan Public Prosecutor

The Antitrust Authority points out that it also started the investigation following the activity carried out by the Public Prosecutor's Office and the Court of Milan. Between April and June 2024, in fact, the Court of Milan placed Giorgio Armani Operations, which belongs to the Armani Group and outsources the production of accessories, and Manufactures Dior, a company that belongs to the Italian branch of Christian Dior, one of the flagship brands of the luxury group Lvmh, and that oversees the manufacture of travel items, bags and leather goods of the French brand. Both companies, according to the public prosecutor's office, did not sufficiently supervise their supply chain: they would have contracted out production to suppliers who, however, would not have been able to produce in-house, and would in turn have commissioned production to subcontracting companies guilty of caporalisation.

The Codacons (Italian Consumers' Association) has issued a statement on the opening of the investigation: 'Consumers who buy products from the two fashion giants spend not inconsiderable sums of money to buy clothing, footwear and accessories that, on paper, should represent excellence in quality and workmanship,' reads a note. The Antitrust Authority's accusations, however, seem to prove the opposite, highlighting how supplies come from workshops that employ workers with inadequate wages, working hours beyond the limits of the law and inadequate health and safety conditions. Elements that would make the very high prices charged by the two brands to the public totally unjustified, causing obvious harm to consumers. It would also create a clear imbalance between the two fashion giants' revenues and the wages of the workers, who are exploited and underpaid'.

Armani's response: 'Unfounded assumptions, but we are cooperating'

The Armani Group commented on the investigation, speaking of "unfounded hypotheses" but assuring full cooperation, as it had already done with the Court a few months ago: "The Armani Group takes note of the start of proceedings for alleged unfair commercial practices that allegedly relate to some aspects of institutional communication. The companies involved assure full cooperation with the proceeding Authority, consider the hypotheses outlined as unfounded and are confident that the investigations will have a positive outcome," reads a note.

Dior: 'We condemn acts of the two suppliers. Relations broken"

The Maison Dior, which is part of the French luxury group Lvmh, also commented for the first time on the presence of these episodes in its subcontracting chain: "In recent weeks, the Maison Dior has been informed by the Italian judicial authorities of the discovery of illegal practices at two of its suppliers in charge of the partial assembly of men's leather goods," a note said. The Maison Dior strongly condemns these improper acts, which not only contradict in the most absolute manner the values of the company and the code of conduct signed by the two companies, but also in no way reflect the work of its artisans and the bond that unites Dior to Italy. No new orders will be placed with these suppliers in the future. Dior is working hard to strengthen existing procedures. Despite regular checks, these two suppliers had managed to conceal these practices from Dior'. The French fashion house was also keen to point out that the suppliers involved did not produce women's handbags but 'instead participated exclusively in the partial assembly of men's leather goods'.

Federmoda's alarm: risk of cascading effect

Launching an alarm is the president of Federmoda, Giulio Felloni: 'It could certainly generate a cascade effect from companies all the way to the end consumer,' he explained to the LaPresse news agency. According to Felloni, today that of "giving ethically valid products, both in content and workmanship" is a real "necessity" for companies, because "it is the clientele that demands this added value".

(to be updated)