Prosecutors in Milan, Italy, are investigating the supply chains of approximately a dozen fashion brands following reports of worker exploitation, according to Reuters.
In June 2024, a Milan court appointed a commissioner to oversee an LVMH (Moët Hennessy Louis Vuitton) subsidiary responsible for producing Dior handbags after illegal working conditions were uncovered at four of its suppliers.
Inspections revealed that workers at these suppliers endured excessively long hours, often working through the night and on holidays, with some forced to sleep at their workplace without proper contracts.
This investigation, which also uncovered cases of illegal immigration, is part of a broader initiative by Milan prosecutors and Italian police to examine small manufacturers supplying around a dozen other brands. The names of these brands remain confidential due to the ongoing investigation.
This marks the third instance in 2024 where the Milan court has proactively addressed companies’ failures to adequately oversee their supply chains. In April, similar measures were taken against a company owned by Giorgio Armani. The Armani Group responded by asserting their commitment to minimizing abuses within their supply chain.
While LVMH and Armani are not under investigation, their suppliers face serious allegations of worker exploitation, according to court documents reviewed by Reuters. LVMH declined to comment on the court’s decision.
The appointment of a special commissioner allows the subsidiaries of these brands to address and rectify supply chain issues while continuing operations.
Since 2014, Milan prosecutors have been investigating recruitment firms for illegal employment practices, tax evasion, and evasion of welfare and pension contributions. This probe has recently expanded to include the fashion industry, uncovering similar issues that were initially identified in logistics, transportation, and cleaning services.
A recent case highlighted that a small manufacturer charged Dior €53 (INR 4,500) to produce a handbag that retailed for €2,600 (INR 2,34,000)
In June 2024, a Milan court appointed a commissioner to oversee an LVMH (Moët Hennessy Louis Vuitton) subsidiary responsible for producing Dior handbags after illegal working conditions were uncovered at four of its suppliers.
Inspections revealed that workers at these suppliers endured excessively long hours, often working through the night and on holidays, with some forced to sleep at their workplace without proper contracts.
This investigation, which also uncovered cases of illegal immigration, is part of a broader initiative by Milan prosecutors and Italian police to examine small manufacturers supplying around a dozen other brands. The names of these brands remain confidential due to the ongoing investigation.
This marks the third instance in 2024 where the Milan court has proactively addressed companies’ failures to adequately oversee their supply chains. In April, similar measures were taken against a company owned by Giorgio Armani. The Armani Group responded by asserting their commitment to minimizing abuses within their supply chain.
While LVMH and Armani are not under investigation, their suppliers face serious allegations of worker exploitation, according to court documents reviewed by Reuters. LVMH declined to comment on the court’s decision.
The appointment of a special commissioner allows the subsidiaries of these brands to address and rectify supply chain issues while continuing operations.
Since 2014, Milan prosecutors have been investigating recruitment firms for illegal employment practices, tax evasion, and evasion of welfare and pension contributions. This probe has recently expanded to include the fashion industry, uncovering similar issues that were initially identified in logistics, transportation, and cleaning services.
A recent case highlighted that a small manufacturer charged Dior €53 (INR 4,500) to produce a handbag that retailed for €2,600 (INR 2,34,000)
Italian law mandates that brands are responsible for conducting thorough checks on their outsourced production suppliers. Previously, Italian magistrates only targeted suppliers mistreating workers, but Milan prosecutors are now leveraging a legal provision aimed at combating companies infiltrated by organized crime, placing them under judicial administration through appointed commissioners.