Armani Faces €3.5 Million Fine for Misleading Advertising on Labor Practices

Italian luxury is once again in the spotlight of justice. This time, with Armani Group as protagonist. The Italian company has been fined €3.5 million for misleading advertising about the working conditions of its subcontractors.

The Italian Competition Authority (Agcm) accuses it of outsourcing part of its production to subcontractors without adequate controls, according to a statement. It also targets it for making “false statements on ethics and social responsibility.“

The agency claims that such irregularities “seriously harmed workers who produced Armani brand handbags and leather accessories.“ Armani intends to appeal to the Regional Administrative Court, with the “certainty of having always acted with the utmost correctness,“ it said in a press release.

Armani maintains, in the face of the accusations, that it has acted “always with the utmost correctness”

Agcm has detected “machinery without safety devices, unhealthy working environments and employees working illegally”. Armani would have outsourced much of its production of handbags and accessories to suppliers who, in turn, hired such companies.

This is not the first scandal involving an Italian luxury company. In May of this year, an Italian court intervened against Valentino after uncovering serious labor law violations in subcontracted workshops. And last year, Dior’s production and design company was placed under receivership, investigated for alleged labor exploitation.

In 2023, an opaque subcontracting network was uncovered in the manufacture of handbags for Dior and Armani. The workshops, operated by third parties, employed undocumented immigrants, subjected to abusive working conditions and paid very low wages. The revelations led to the temporary intervention of operational units of both Dior and Armani, and called into question the sustainability discourse of Italian luxury. However, months later, the authority closed the investigation.

Such is the extent of the scandals that have hit various luxury companies in Italy that, in June 2024, the Milan court proposed a plan for them to reinforce their controls over suppliers and thus ensure respect for labor legislation.