MILAN / LONDON (IT BOLTWISE) – The Italian luxury fashion industry is under pressure as Milan prosecutors investigate big names such as Armani, Prada and Gucci. The suspicion: exploitation of workers in subcontractors. The government is planning a new certification system to protect the industry’s reputation.
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In Italy, the luxury fashion industry is coming under increasing pressure as prosecutors in Milan are investigating several well-known brands. The focus is on companies such as Armani, Prada and Gucci, which are suspected of outsourcing their production to subcontractors who employ workers under precarious conditions. These allegations are not new, but the current investigation could have far-reaching consequences for the entire industry.
The public prosecutor’s investigation focuses on the luxury brands’ supply chains. There is a suspicion that the production of expensive clothing is being outsourced to smaller companies that systematically violate labor law. The focus is particularly on the working conditions in these subcontractors, which are often run by Chinese owners. The allegations range from employing foreign workers without residence permits to extremely low wages and excessively long working hours.
Unions have long criticized luxury brands for having their products manufactured by smaller companies that violate labor laws. These practices are often referred to as “Made in Misery.” In the past, abuses in companies run by Chinese owners have been uncovered several times. A particularly blatant case concerns the production of a handbag that was made for 53 euros and then sold for 2,600 euros.
The Italian government under Prime Minister Giorgia Meloni is now planning to develop a new certification system for awarding contracts. This is intended to ensure that working conditions throughout the entire supply chain meet legal standards. There is great concern that the current allegations could cause lasting damage to the reputation of the Italian fashion industry. Brands like Loro Piano and Tod’s are already under court supervision over similar allegations.
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