Armani, Dior face Italian antitrust probe on labor practices
ITALY鈥橲 Competition Authority opened an investigation into some companies controlled by luxury fashion groups Giorgio Armani SpA and LVMH鈥檚 Christian Dior over alleged unfair commercial practices.
The probe has prompted Dior to cut off orders from the targeted suppliers, the fashion house said in a statement after the investigation was made public last Wednesday.
Dior is collaborating with Italian authorities and strengthening its checks on its suppliers, the company said on Wednesday, after the said it was probing the luxury group for allegedly misleading consumers over its social commitment and craftsmanship.
In its first comments since its Italian unit was put under court administration last month, Dior, part of French luxury group LVMH, condemned the illegal practices uncovered at some suppliers and said it had stopped working with them.
The Rome-based antitrust regulator is investigating whether the two brands used suppliers applying unfair commercial practices, including paying employees 鈥渋nadequate鈥 wages and sometimes forcing them to illegally work long hours in inadequate health and safety conditions.
The probe is only the latest move by authorities in Italy to crack down on alleged unlawful business conduct in the fashion industry.
In June, a Milan court put a unit of the French fashion house Dior under citing alleged labor violations in its supply chain. Dior, which produces luxury bags and accessories in Italy, didn鈥檛 鈥減revent and stem labor exploitation within its production cycle,鈥 the Italian police said at the time.
Similarly, in April a Milan judge placed the manufacturing unit of Armani under the same control for alleged workers exploitation.
On Tuesday last week, financial police and antitrust officials searched the headquarters of Giorgio Armani SpA, G.A. Operations SpA and Christian Dior Italia, according to the statement.
The Armani Group on Wednesday said it was aware of the investigation.
鈥淭he companies involved are fully committed to co-operate with the authorities, believe that the allegations have no merit and are confident of a positive result following the investigation,鈥 the Italian company added in a written statement. 鈥 Bloomberg with a report from Reuters
