Italy: The price of fashion?

Italian authorities crack down on luxury brands for labour abuses in supply chains. Dior settles, pledges reforms, and agrees to pay €2 million to fund programmes to identify victims of labour exploitation

The key points: Italian authorities are cracking down on labour abuses in luxury fashion supply chains. Raids on Dior and Armani revealed subcontracting to firms using undocumented workers in poor conditions. Bags costing €60 to make were sold for €2,000–€3,000, despite claims of “Italian craftsmanship.” Dior has settled with authorities, funding anti-exploitation programmes and tightening supplier controls, but has not reduced bag prices.

Why this matters: This exposes reputational and legal risks for luxury brands and highlights the gap between marketing claims and supply chain realities. It also shows that national authorities may act even as EU-wide rules are relaxed.

What might happen next: Other luxury brands could face similar scrutiny and enforcement. There may be growing pressure for greater transparency and ethical standards in supply chains, regardless of changes to EU due diligence laws.