A recent investigation by a Milan court revealed that two of LVMH's Chinese-owned subcontractors headquartered outside of Milan had mistreated their employees, leading to the placement of the Christian Dior brand under judicial administration for a year. This came after Giorgio Armani was found guilty in April of "culpably failing" to monitor its suppliers, as reported by Reuters.
Dior was deemed to have been irresponsible in failing to take "appropriate measures to check actual working conditions or technical capabilities of contracting companies," even though she was not found guilty criminally.
According to the court's inquiry, thousands of small foreign-owned firms in Italy supply luxury labels with goods that are produced at prices comparable to those of China but can use the coveted "Made in Italy" label. This suggests that unethical manufacturing methods are widespread throughout the country.
According to the filing, "it is not something that concerns single product lots, but a generalized and consolidated manufacturing method," as high-end fashion manufacturers look to increase their earnings.
According to Reuters, investigations are underway into the supply chains of about a dozen other fashion firms since Italian law mandates that businesses who outsource production have sufficient control over their suppliers.