In 2024, prosecutors in Milan demanded documentation from 13 global luxury brands—including Gucci, Prada, Versace, and Yves Saint Laurent—over suspicions of migrant exploitation within their Italian supply chains. Inspectors found luxury goods being produced in subcontractor workshops by Chinese and Pakistani workers in conditions described as degrading. The investigation covers the largest number of companies to date. Prosecutor Paolo Storari aims to verify whether these brands have effective mechanisms to prevent labor rights violations. The process relies on audits and internal control systems, with the goal of dismantling a subcontracting model that funnels work to workshops run by Chinese owners. “It’s a chain of exploitation,” says Deborah Lucchetti of the Clean Clothes Campaign [1][2].
Inhumane Working Conditions at Subcontractor Workshops
Since early 2024, five brands have come under judicial supervision: Loro Piana, Dior Manufactures, Giorgio Armani Operations, Alviero Martini, and, as of November, the Tod’s group along with three managers. Prosecutors are seeking a six-month advertising ban for Tod’s. Inspections at Loro Piana suppliers revealed ten Chinese workers—including five undocumented—working 90-hour weeks for €4 an hour. They slept on factory premises in illegal housing. At Tod’s, wages dropped even lower, from €2.75 to €3 per hour—nearly four times below the Italian minimum [5][6][7][8][9][10][11].
Government Response and Consequences for the Luxury Sector
The gap between production costs and retail prices is staggering. Dior paid €53 to have a handbag made, then sold it for €2,600. At Armani, bags bought from suppliers for €93 were retailed for €1,800 [1][2][3]. The Italian government responded defensively: Industry Minister Adolfo Urso claimed the reputation of Italian fashion was “under attack.” He proposed a law for voluntary supply chain certification, but critics argue this falls far short [4][5]. In May 2024, Italy’s competition authority closed proceedings against Dior after the brand pledged €2 million to support exploitation victims and to tighten supplier oversight. Italy remains a manufacturing hub—over half the world’s luxury goods are produced here [6][7][4].