London/Rome - Italy’s competition authority is investigating whether Armani and Dior have misled consumers about their production processes, following reports that local companies in their supply chains pay workers too little and force them to work long hours. In a statement Wednesday, the authority said Armani and Dior "may have issued untrue statements about their ethics and social responsibility, in particular with regard to working conditions and compliance with the law by their suppliers." The investigation is focused on some firms within the Armani Group and some within the LVMH-owned Dior Group, the authority said, adding that inspections had been carried out at these firms’ premises Tuesday.
Top business headlines, all in one place The firms are being investigated for possible "unlawful" conduct in the marketing and sale of clothes and accessories, in violation of Italy’s Consumer Code, it noted. Breaches of the code can result in fines of up to €10 million (US$10.9 million).
Many mainstream fashion brands have long faced allegations of exploitative working conditions in their supply chains. But increased scrutiny of luxury brands stands out because it challenges perceptions that high prices, Europe-based suppliers and superior artisanship mean garments are produced ethically. Italy’s competition authority said Armani and Dior "emphasized craftmanship and quality," while using supplies from factories "employing workers who would receive inadequate wages.
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