Luxury, under the magnifying glass of the law. Milan prosecutor’s office is investigating the supply chain of around a dozen brands fashion, which join the already investigated Armani and Dior, according to Reuters, after the Italian production arm of the French brand belonging to LVMH has been placed under judicial administration in an investigation into labor exploitation. The same thing that had happened before with the Italian Armani.
inspections on site and checks on electricity usage data led prosecutors to allege that workers at some Dior suppliers worked long hours, often at night and during holidays. Some of the staff slept where they worked, did not have regular contracts and two of them had illegally emigrated to Italy.
Now Milan prosecutors and Italian police are investigating more small manufacturers that supply around a dozen brands. Therefore, a special commissioner has been appointed, who aims to give subsidiaries of fashion brands time to solve problems in their supply chain while they continue to operate.
Neither LVMH nor Armani are included in this investigationwhile other investigated suppliers face accusations of labor exploitation, according to copies of court decisions.
The Milan prosecutor’s office has carried out investigations over the last decade, to which fashion has recently added
The Milan prosecutor’s office has been investigating recruitment companies for the last decade who allegedly employed workers illegally, evading taxes, as well as social assistance and pension contributions, to reduce the cost of the services they provided.
The investigations focused on sectors such as logistics, transportation and cleaning services, where workers were supplied by companies that emerged and disappeared every two years. Recently, attention has focused on the fashion sector, where investigations have highlighted similar problems this year.
Yotalia represents between 50% and 55% of global luxury goods production, according to the consulting firm Bain. The latest Milan investigation has shown that a small manufacturer could charge a luxury brand 53 euros to make a bag, which the brand sold in stores for 2,600 euros.
Under Italian law, brands that outsource production are responsible for carrying out appropriate checks on suppliers. In the past, actions taken by Italian magistrates in relation to labor exploitation investigations concerned only suppliers who mistreated workers.
However, prosecutors in Milan have resorted to a provision of the law that was originally designed to deal with companies infiltrated by the mafia. These companies would be placed under judicial or judicial administration by appointing special commissioners to manage them.
