Dior, Armani, Alviero Martini: the pitfalls of subcontracting

According to the Milan court, Manufactures Dior failed to carry out the necessary checks on the companies to which it entrusted the production of the goods, which were allegedly manufactured "under exploitative conditions" in various workshops in the province of Milan.

The Italian press reported in several media, such as the daily Il Corriere and Il Messaggero, that Manufactures Dior had not been able to "prevent and curb the phenomenon of labour exploitation" in the companies to which it subcontracted work, and therefore to counter the phenomenon of "caporalato". For this reason, the Milan court ordered the company to be placed under administration. This is a procedure whereby the management of a company is entrusted to a court-appointed administrator in order to realign the company with the legal economy by correcting illegal practices.

The investigation into the alleged forced labour was coordinated by Public Prosecutor Paolo Storari and conducted by the Carabinieri in Milan. It forms part of a wider framework which, in recent months, has seen other fashion companies - Alviero Martini and Armani Operations - subject to the same judicial measure.

The subcontractors are accused of maximising profits by cutting labour costs, employee safety and tax procedures.

In the four factories inspected, located in the provinces of Milan, Monza and Brianza, 32 workers were identified, seven of whom were working illegally and two of whom were in the country illegally.

Five company owners, all Chinese, were prosecuted for forced labour and other related charges. Fines totalling 138,000 euros and administrative fines of 68,500 euros were imposed, while the activities of four companies were suspended for serious breaches of safety regulations and use of illegal labour.

These events highlight the difficulty, even for the most prestigious companies, of verifying the transparency and actions of production chains, from the beginning to the end of the production process, when the latter is partly entrusted to subcontractors. However, in recent years, the luxury fashion sector has been particularly vigilant and active in curbing these phenomena, which had become marginal, thanks to the often colossal investments made to meet the requirements (the Life 360 initiative launched by LVMH to guarantee a production process that meets the criteria of transparency and ethics from a societal and environmental point of view is one example).

It is in response to these issues that major groups have, for several years now, been buying up factories and production sites in order to verticalise the production process.