By Mauro Orru


Italy's competition watchdog launched an investigation into Christian Dior and Giorgio Armani, saying the luxury-goods companies might have resorted to illegal labor practices to produce and sell their high-priced goods.

The Italian Competition Authority, or AGCM, said the companies relied on supplies from workshops where laborers receive inadequate wages, work overtime and in poor health and safety conditions, all the while emphasizing the craftsmanship of their goods to promote and sell them to customers.

The probe comes weeks after an investigation by Milan prosecutors found workshops making handbags and other leather goods for Armani and Dior used exploited foreign labor to produce the high-end products at a fraction of their retail price.

The AGCM said Italian antitrust officials had conducted more inspections at Dior and Armani premises on Tuesday.

Dior said in a statement that Italian authorities had informed the company of illegal practices at two of its suppliers responsible for the partial assembly of leather goods for men, adding it "firmly condemns these unworthy acts" and that it would no longer place orders with those suppliers.

"Aware of the gravity of the violations committed by these suppliers and the improvements to be made to its checks and procedures, the house of Dior is collaborating with the designated Italian administrator and the Italian authorities," the company said.

Armani said in a separate statement that it acknowledges the opening of an investigation. "The companies involved are fully committed to co-operate with the authorities, believe that the allegations have no merit and are confident of a positive result following the investigation," the group said.


Write to Mauro Orru at mauro.orru@wsj.com


(END) Dow Jones Newswires

07-17-24 1129ET