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Two years ago, Italian prosecutors uncovered worker exploitation in factories allegedly supplying luxury fashion brands. The process exposed the cracks in the ‘Made in Italy’ supply chain, undermining their long-standing association with superior quality and ethics, and challenging the assumption that worker exploitation was unique to fast fashion.
The first probe named five brands whose downstream suppliers were accused of exploitation: Dior, Giorgio Armani, Loro Piana, Valentino, and mass-market Italian brand Alviero Martini. These cases have since been closed, after the court was satisfied that the necessary changes had been made. It sent shockwaves through the industry, but prosecutors didn’t stop there. In the years since, the investigation has expanded to include 22 additional brands.
The latest wave, announced late last week, includes Chanel, Moncler, Bvlgari, and Brunello Cucinelli, among others. None of these brands have been placed under court administration or directly accused of wrongdoing, but prosecutors have requested that they share governance documentation to support investigations into subcontractors. All of the brands that responded to a request for comment noted that they are cooperating with prosecutors and have mechanisms in place to weed out unethical practices.
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Prosecutors started with the most serious allegations, citing Italy’s Anti-Mafia Code, the national legal framework for preventing organized crime. In most cases, court documents called out evidence of forced labor and factories outsourcing excess production to Chinese-owned factories with exploitative conditions, several of which were found to be breaching health and safety codes, and violating employment laws. The brands involved responded swiftly to distance themselves from the incriminated suppliers and strengthen supply chain controls.
The second phase, in December 2025, named a further 13 brands due to relationships with suppliers Bag Group, Effellemoda, and New Leather: Prada, Gucci, Versace, Dolce & Gabbana, Missoni, Ferragamo, Saint Laurent, Givenchy, Pinko, Coccinelle, the Italian subsidiary of Alexander McQueen, the Italian operating company for Off-White, and Adidas. Again, allegations related primarily to the suppliers’ exploitation of workers, most of whom were Chinese or of Chinese descent. In each case, the brands in question were ordered to supply additional documentation to the court; this investigation remains ongoing.
The latest wave of allegations concern subcontractors manufacturing luxury packaging, including garment bags, dust bags, shopping bags, and pouches. Recent inspections at Milanese manufacturer Moda Fashion Styles and Varese-based subcontractor Isacco revealed more employees of Chinese ethnicity working under exploitative conditions.
As these probes sweep up more luxury brands, we break down what’s been uncovered so far and what brands need to know.
What the probes found
The process began as pressure mounted for Italian companies to comply with incoming EU regulations related to traceability and supply chain due diligence. In Italy, fashion was a clear place to start, as a key export with one of the most complex and notoriously opaque supply chains.
It touched on several systemic issues. Firstly, subcontracting, whereby orders are outsourced to smaller players subject to less scrutiny from brands and auditors. While the regulatory push for supply chain transparency and traceability has pushed some brands to streamline their supplier bases and enforce tighter controls over subcontracting, many still don’t have this level of oversight.
Secondly, the issue of forced labor, which is particularly complex in Italy. Prosecutors wanted to stamp out so-called “caporalato” (gangmasters), says Andrea Sianesi, professor of operations and supply chain management at Politecnico Di Milano, and part of the taskforce that worked with prosecutors to find a potential solution. The caporalato system has a long history of recruiting undocumented laborers, withholding portions of their wages, and placing them in exploitative conditions. Undocumented immigrants are particularly vulnerable to this system, adds UCL lecturer Roya Derakhshan, whose research covers marginalized stakeholders in overlooked contexts.
