Italian police conducted raids on Thursday at the offices of several luxury fashion houses, including Bulgari and Chanel, as part of an investigation into labour exploitation in their supply chains. The operation, led by Milan prosecutors, focuses on allegations that brands used subcontractors who employed Chinese workers under exploitative conditions.
Systemic Subcontracting Under Scrutiny
At the heart of the probe is the widespread practice of luxury brands outsourcing production to suppliers, who in turn subcontract to smaller firms. This chain often ends with workshops that hire Chinese migrants, paying them below minimum wage and subjecting them to unsafe working environments. Milan prosecutor Paolo Storari confirmed the raids to AFP, noting that the investigation includes brands such as Prada, Givenchy, Dolce & Gabbana, Brunello Cucinelli, Etro, Goyard Italie, Jacob Cohen Company, Moncler, and Stefano Ricci. The information was first reported by the Italian business daily Il Sole 24 Ore.
This is not the first time Italian luxury labels have faced scrutiny over labour conditions. Loro Piana, a brand known for its high-end cashmere, was previously placed under temporary judicial administration after concerns about its suppliers. The measures were lifted only after the company agreed to strengthen oversight of its supply chain. Similar cases have emerged across the fashion industry, highlighting a persistent problem in Italy's manufacturing sector, where subcontracting is deeply entrenched.
The raids come amid broader European efforts to address labour abuse in global supply chains. The European Union has been pushing for stricter due diligence laws, requiring companies to monitor their subcontractors for human rights violations. Italy, as a major hub for luxury goods production, is under particular pressure to enforce these standards. The Milan investigation could set a precedent for how such laws are applied in practice.
For the luxury brands involved, the reputational risk is significant. Consumers and investors increasingly demand transparency, and any association with exploitation can damage brand value. The probe also raises questions about the sustainability of the subcontracting model, which allows brands to cut costs but often at the expense of workers' rights.
In related news, the European Public Prosecutor's Office recently conducted raids in Athens and Kastoria, uncovering a €46.9 million VAT carousel fraud, underscoring the EU's broader crackdown on financial crimes. Meanwhile, a deadly fire in a Brussels construction site lift shaft killed several workers, highlighting safety concerns in the continent's building sector.
The Milan investigation is ongoing, and prosecutors have not yet announced charges. However, the raids signal a more aggressive approach to enforcing labour laws in Italy's fashion industry. As the probe widens, it may force luxury brands to rethink their reliance on opaque supply chains and adopt more rigorous oversight mechanisms.
