Two prominent Italian luxury brands are facing scrutiny after an in-depth investigation revealed that they paid minimal amounts to subcontractors to produce high-end handbags sold for thousands of dollars.
In recent months, Milan prosecutors have investigated the use of third-party suppliers by Dior, a subsidiary of LVMH. The findings indicate that the suppliers exploited workers to produce handbags at significantly lower costs than their retail prices, Hollywood Unlocked reports.
Reuters reported that Dior paid a supplier $57 to manufacture handbags that were sold for approximately $2,780, excluding material expenses such as leather, according to documents obtained by authorities.
A prosecution document cited by Reuters stated that the Dior department involved did not implement “appropriate measures to check the actual working conditions or the technical capabilities of the contracting companies.” This lack of oversight has raised serious concerns about the brand’s supply chain practices.
Investigations conducted in March and April unearthed evidence that workers were living in the facility to maintain continuous handbag production. Reuters reported that electricity consumption data indicated work was being carried out during nights and holidays.
The subcontracting firms in question were Chinese-owned, and prosecutors noted that most workers were from China, including two individuals residing in the country unlawfully and seven working without proper documentation.
The probe also revealed that safety mechanisms on gluing and brushing machines had been removed to enable faster operation by workers. This potentially hazardous practice further underscores the exploitative conditions faced by the laborers.
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