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Dior Says Collaborating with Authorities after Italian Antitrust Probe

Logos of Dior brand are seen outside a Dior store in Paris, France, March 3, 2017. (Reuters)
Logos of Dior brand are seen outside a Dior store in Paris, France, March 3, 2017. (Reuters)
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Dior Says Collaborating with Authorities after Italian Antitrust Probe

Logos of Dior brand are seen outside a Dior store in Paris, France, March 3, 2017. (Reuters)
Logos of Dior brand are seen outside a Dior store in Paris, France, March 3, 2017. (Reuters)

Dior is collaborating with Italian authorities and strengthening its checks on its suppliers, the company said on Wednesday, after the Italian competition watchdog said it was probing the luxury group for allegedly misleading consumers over its social commitment and craftsmanship, Reuters reported.

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 antitrust authority's investigation follows a probe by Milan prosecutors into suppliers of Dior which are accused of having exploited workers to produce handbags for the fashion brand.

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Italy Antitrust Probes Armani, Dior over Alleged Exploitation of Workers

FILE PHOTO: People stand in front of a Christian Dior store in Piazza Di Spagna (Spanish Square) in Rome, Italy December 19, 2020. REUTERS/Remo Casilli/File Photo
FILE PHOTO: People stand in front of a Christian Dior store in Piazza Di Spagna (Spanish Square) in Rome, Italy December 19, 2020. REUTERS/Remo Casilli/File Photo
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Italy Antitrust Probes Armani, Dior over Alleged Exploitation of Workers

FILE PHOTO: People stand in front of a Christian Dior store in Piazza Di Spagna (Spanish Square) in Rome, Italy December 19, 2020. REUTERS/Remo Casilli/File Photo
FILE PHOTO: People stand in front of a Christian Dior store in Piazza Di Spagna (Spanish Square) in Rome, Italy December 19, 2020. REUTERS/Remo Casilli/File Photo

Italy's competition authority said on Wednesday it had begun an investigation into luxury fashion groups Armani and Dior over the alleged exploitation of workers in their supply chain.
In June and April, Milan prosecutors ordered that several Chinese-owned firms in Italy - producing luxury goods for Dior and Armani - be placed under administration, accusing them of systematically abusing their employees.
The regulator alleged that Armani and Dior "emphasized the craftmanship and the excellence of their workmanship" while relying on workshops employing people on inadequate salaries, working long hours and in violation of health and safety rules.
The probe focused on some companies of the Armani Group and the LVMH-controlled Dior Group, and inspections were carried out at the companies on Tuesday, Reuters quoted the agency as saying.
"The (Armani and Dior) companies may have made untrue ethical and social responsibility claims, in particular with regard to working conditions and compliance with legality at their suppliers," the antitrust agency said.
They were placed under investigation "for possible unlawful conduct in the promotion and sale of articles and clothing accessories, in breach of the (Italian) Consumer Code," it said.
Armani and LVMH did not immediately respond to requests for comment.
Breaches of the consumer code are punishable with fines ranging from 5,000 euros ($5,456) to 10 million euros ($10.91 million).
The luxury industry's supply chain has come under increased scrutiny by consumers and investors in recent years. To reduce risks to their reputation, fashion labels have curbed the number of sub-contractors and brought production in-house.
Italy's antitrust agency also polices consumer rights and unfair commercial practices. Last year, it fined companies owned by fashion influencer Chiara Ferragni almost 1.1 million euros over misleading charity claims on a Ferragni-branded Christmas cake.