Italian Police Visit Fashion Firms Including Gucci and Prada in Labour Abuse Probe

Italian Fashion Brands Under Investigation for Labour Abuse

By Emilio Parodi

MILAN, Dec 4 (Reuters) - Italian police have visited the headquarters of 13 high-end fashion firms, demanding documents on governance and supply-chain controls as part of an investigation into alleged exploitation of workers at subcontractors, judicial papers show.

The brands that received the orders are Dolce & Gabbana, Versace, Prada, Adidas Italy, Off-White Operating, Missoni, Ferragamo, Givenchy Italia, Alexander McQueen Italia, Kering's Gucci and Yves Saint Laurent Manifatture, Cris Conf. (Pinko) and Coccinelle.

The operation, carried out on Wednesday, follows an investigation that has placed five other luxury groups under court-appointed administration and the same measure sought for a sixth, in a series of cases that have tarnished the industry's image over the past two years.

Two sources with direct knowledge said the move marks the final stage of a process aimed at forcing major fashion houses to clean up their supply chains.

POLICE ACT IN SEVERAL CITIES

The additional brands were drawn into the probe after police found garments and subcontracting documents linked to them during earlier searches of Chinese-owned workshops. They face less severe measures because smaller quantities of their products were found at the inspected sites, the papers show.

None of the 13 companies is under investigation, and prosecutors have not sought court-appointed administration for any of them, according to the orders seen by Reuters. The firms did not immediately respond to requests for comment.

Wednesday's operation was led by the Carabinieri labour unit in Milan, with support from officers in Florence, Parma and Varese.

Prosecutors want to assess whether the companies were involved in the use of exploited labour and if their compliance and governance models are adequate to prevent abuse, the papers show.

Once the material is handed over, the firms will be allowed to address any issues on their own initiative. If they fail to do so, prosecutors reserve the right to take further preventive measures, the documents show.

GOVERNMENT SEEKS TO SAFEGUARD 'MADE IN ITALY'

Italian magistrates have uncovered widespread exploitation in the fashion and luxury supply chain.

Industry Minister Adolfo Urso said in October the government had proposed a bill to create legal certification for fashion companies to protect the reputation of ‘Made in Italy’ brands.

Under the plan, brands could obtain third-party certification of supply-chain compliance. Italy accounts for 50%-55% of global luxury goods production, consultancy Bain estimates.

In May, Italy's fashion brands signed an accord with legal and political authorities to fight worker exploitation.

LONG LIST OF DOCUMENTS 

The orders seek a wide range of material, starting with governance records such as historical company registry extracts, intercompany agreements, organisation charts, job descriptions for staff involved in supplier oversight, and minutes of board and auditors' meetings since 2023.

They also request details of internal controls, risk assessments and audit activities.

(Reporting by Emilio Parodi. Editing by Keith Weir and Mark Potter)