Italy’s competition authority has launched an investigation into luxury brands Armani and Dior amid allegations of misleading consumers about their ethical practices and social responsibility. The probe follows revelations by prosecutors regarding worker exploitation at suppliers linked to both fashion groups.
The competition watchdog suspects that both Armani and Dior may have misrepresented their commitment to high ethical standards, particularly concerning working conditions and legal compliance within their supply chains. Despite emphasizing craftsmanship and quality, the companies allegedly sourced products from workshops where workers endured substandard wages, excessive working hours beyond legal limits, and inadequate safety conditions.
In Milan, prosecutors uncovered workshops where underpaid workers, including illegal immigrants, manufactured leather bags sold to Armani and Dior at significantly lower costs than retail prices. Several Chinese-owned Italian suppliers involved in these practices have been placed under investigation, prompting authorities to appoint commissioners to oversee corrective actions in the implicated production units.
Dior, part of the French luxury conglomerate LVMH, has pledged full cooperation with Italian authorities and announced stringent measures to enhance supplier oversight. It has also committed to cease future orders with the implicated suppliers, acknowledging failures in detecting these labor abuses despite regular audits.
Meanwhile, the Armani Group remains confident in a favorable outcome from the ongoing antitrust investigation. The company asserts its complete cooperation with authorities and disputes the validity of the allegations leveled against it. Italian authorities conducted searches at the premises of both Armani and Dior as part of the investigation into potential violations of the Consumer Code, which could result in fines ranging from 5,000 to 10 million euros for breaches.
The investigation highlights growing scrutiny over the fashion industry's supply chains and their treatment of workers, underscoring broader concerns about corporate accountability and transparency. Both Armani and Dior, renowned globally for their luxury products, face significant reputational risks as they navigate these allegations and regulatory inquiries.
The outcome of the investigation could influence consumer perceptions and purchasing behaviors toward these iconic fashion brands, prompting calls for stricter regulations and ethical sourcing practices within the global luxury market. As the probe unfolds, stakeholders await further developments that could reshape industry standards and corporate responsibilities in the fashion sector.
