Blogs & News

Italy's competition watchdog, AGCM, has launched investigations into luxury fashion giants Giorgio Armani and Christian Dior amidst allegations of severe labor violations within their supply chains. The probe, prompted by concerns over underpaid and overworked staff employed by their suppliers, marks a significant scrutiny of the ethical practices of high-profile fashion brands.

Allegations and Investigations

The investigation, conducted in collaboration with the Guardia di Finanza financial police, involved inspections at the headquarters of Giorgio Armani SpA, G.A. Operations SpA, and Christian Dior Italia Srl. This move follows earlier judicial actions against subsidiaries of Armani and Dior due to suspicions of labor law breaches by their subcontractors.

Both fashion houses, renowned for their high-end products and craftsmanship, face allegations of sourcing materials from workshops that exploit workers through inadequate wages, excessive working hours, and substandard health and safety conditions. These alleged practices contradict the companies' public commitments to ethical sourcing and social responsibility.

Judicial Actions and Company Responses

Earlier this year, a unit of Giorgio Armani was placed under judicial administration after it was discovered that one of its suppliers subcontracted production to "Chinese workshops" in Milan, where labor laws were reportedly violated. Despite Giorgio Armani Operations not being directly implicated, the incident highlighted concerns over the oversight of their supply chain practices.

Similarly, Christian Dior Italia Srl, a subsidiary of LVMH-owned Dior, faced judicial scrutiny for its handling of subcontracted production, particularly regarding the 2024 collection of bags and accessories. Investigations revealed that subcontractors, described as "Chinese factories," employed workers under exploitative conditions, including inadequate pay, long working hours, and substandard living conditions.

Regulatory Concerns and Ethical Implications

The AGCM's investigation also focuses on potential violations of Italy's consumer code, particularly in how Armani and Dior marketed their products. Allegations suggest that the companies may have misrepresented their adherence to ethical standards and social responsibility in their promotional materials and public statements.

The implications of these investigations extend beyond legal ramifications, impacting the reputation and brand integrity of two of the fashion industry's most prestigious names. As consumers and stakeholders increasingly prioritize ethical sourcing and corporate accountability, the outcome of these probes could influence broader industry practices and consumer trust.

Industry Responses and Future Implications

Both Giorgio Armani and Christian Dior have stated their cooperation with authorities and commitment to addressing the issues within their supply chains. They emphasize existing measures aimed at preventing abuses and ensuring compliance with labor laws. However, the scale and persistence of these allegations raise questions about the effectiveness of current oversight mechanisms and the depth of corporate responsibility in global supply chains.