Selling an 80,000 Won Item for 3.84 Million Won... Dior and Armani Raided and Seized

Italy Fair Trade Commission Launches Investigation into Labor Exploitation Allegations

As allegations of labor exploitation involving the world-renowned luxury brands Armani and Christian Dior surfaced, Italian authorities have launched a full-scale investigation.

On the 17th (local time), local media including ANSA reported that the Italian Competition Authority (AGCM) announced, "Workers employed by contractors of the two companies were paid low wages and forced to work long hours in workplaces that violated safety regulations. This contrasts sharply with the craftsmanship and excellent production techniques that the two companies have proudly promoted." The Italian Competition Authority also revealed that it conducted raids on the business premises of the two companies in Italy together with the financial police the previous day. Furthermore, the authority intends to conduct a broad investigation not only into potential violations of labor laws by the two companies but also into any breaches of consumer laws during marketing and sales processes.

The Competition Authority judged that promoting craftsmanship and superior quality while producing products through labor exploitation constitutes consumer deception. Earlier, on the 10th of last month, the Milan court ordered the Dior Italy subsidiary of France's Louis Vuitton Mo?t Hennessy (LVMH) to be placed under judicial administration supervision for one year on charges of neglecting labor exploitation by subcontractors. These four subcontractors employed illegal Chinese residents and operated factories 24 hours a day without holidays. The production cost of the bags made this way was only 53 euros (about 80,000 KRW), but Dior sold these bags in stores for 2,600 euros (about 3.84 million KRW). This represents a profit margin close to 50 times the cost.

In April, Armani received a similar sanction to Dior. Armani’s subcontractors paid workers 2 to 3 euros (about 3,000 to 4,000 KRW) for 10 hours of work to produce bags, which were sold to Armani’s suppliers for 93 euros (about 140,000 KRW). Subsequently, these suppliers resold the bags to Armani for 250 euros (about 370,000 KRW), and the bags were sold in stores for 1,800 euros (about 2.67 million KRW).

Regarding this, the Armani Group stated, "We will fully cooperate with the authorities' investigation and believe the allegations are unfounded," adding, "We are confident of a positive outcome after the investigation." Dior also emphasized, "We will cooperate with the authorities' investigation," and added, "We have ceased cooperation with suppliers found to have engaged in illegal practices and are strengthening inspections of other suppliers."