Italian labels Patrizia Pepe and Dixie under court supervision over labour exploitation

Patrizia Pepe and Dixie Face Court Oversight Over Labour Exploitation Claims

Italian Fashion Labels Under Court Administration for Labour Exploitation

ROME, Nov 6 (Reuters) - Italian fashion labels Patrizia Pepe and Dixie have been placed under court administration over the alleged exploitation of foreign workers in their supply chain in Tuscany, prosecutors and judicial sources said on Friday. 

The measure targeted two companies that relied on unscrupulous subcontractors to lower production costs, Luca Tescaroli, chief prosecutor in the city of Prato, said in a statement, without naming them.

Judicial sources later confirmed the companies' identities.

A spokesperson for Patrizia Pepe had no immediate comment, while a spokesperson for Dixie did not immediately respond to a request from Reuters.

Industry-Wide Pressure and Previous Cases

Milan courts have taken similar moves in recent years against other well-known labels, including LVMH-owned cashmere firm Loro Piana and units of fashion houses Valentino and Giorgio Armani, putting pressure on the entire Italian fashion industry to improve labour standards. 

Culpable Inaction and Oversight Failures

'CULPABLE INACTION AND NO PROPER OVERSIGHT'

Court-Appointed Administration and Company Response

Being placed under administration means that court-appointed external administrators will verify steps due to be taken by Patrizia Pepe and Dixie to meet judges' demands on the cleanup of their supply chains.

The two companies, however, are not under any criminal investigation. 

Details of Worker Exploitation

The Florence court that placed them under supervision reprimanded them for "culpable inaction and failure to exercise proper oversight" on subcontractors who exploited Bangladeshi and Albanian workers, Tescaroli said.

The workers were poorly paid, forced to work long hours, denied holidays and constantly harassed and abused, Tescaroli said, adding that 18 of them who cooperated with investigators would be offered legal residence permits.

First Case Involving Albanian Subcontractors

The prosecutor also said it was the first labour abuse case in the textile city of Prato involving Albanian subcontractors, saying they had adopted criminal practices traditionally associated with Chinese-owned sweatshops.

(Reporting by Alvise Armellini, Silvia Ognibene and Emilio Parodi; Editing by Xevi Fontdegloria)