Dior has agreed a number of remedies to settle an Italian competition authority investigation into whether the luxury brand and two of its units misled consumers with their statements about working conditions at its suppliers.

Italy’s competition authority were investigating whether the luxury brand had misled consumers in relation to its craftsmanship and corporate social responsibility claims, following a series of revelations about its operating practices.

Between March and April 2024, Italian police carried out inspections at the suppliers, named Pelletteria Elisabetta Yang SRL, New Leather Italy SRLS, AZ Operations SRLS, and Davide Albertario Milano SRL. Workers were discovered operating in “hygiene and health conditions that are below the minimum required by an ethical approach” and were forced to sleep in the factories. They were also paid less than minimum wage and were using dangerous machinery that was overused and posed a danger to their safety. Dior handbags are sold via the company’s website for as much as $9500.

The Competition Authority said that the pledges made by Dior were an appropriate remedy they have closed the investigation “without establishing any infringement.” Dior’s commitments include paying €2 million ($2.3 million) over five years to support initiatives aimed at helping victims of labor exploitation.

Historically, the ‘Made in Italy’ merchandise mark has been a signifier of quality and prestige but a series of reports coming from Milan about the use of unskilled labour and the exploitation of workers in filthy, unsafe factories has cast a dark shadow over it. Prosecutors in Milan claim that the violation of rules was not a one-off among fashion companies within Italy, but systematic. In April 2024 it was revealed that Giorgio Armani Operations had outsourced the production of bags, belts and leather goods to two firms which in turn subcontracted the work to four Chinese companies on the outskirts of Milan. Workers for these companies were paid just 2-3 euro an hour, working seven days a week to make these goods and required to use machinery with safety devices that had been “purposely and maliciously removed”.

Christian Dior is a subsidiary of LVMH, the luxury goods conglomerate, controlled by Bernard Arnault, listed by Forbes as the world’s richest man, worth an estimated 214 billion dollars.