Italy’s audit system of luxury groups is failing

Following the scandal surrounding working conditions at certain subcontractors of luxury brands based in Italy, Reuters is shedding light through an investigation on the audit system of large luxury groups that is deemed to be “failing”.
Last June, Dior, Armani and many other luxury brands were accused of collaborating with subcontractors who do not offer decent working conditions to their employees.
Unsurprisingly, the companies are currently defending themselves and claiming that they were not informed of the situation. Facts that Reuters questions.
In its report, the news agency points to unpublished legal documents and alleges that checks had indeed been carried out, with audits understood to have revealed no flaws.
Reuters gives the example of the company AZ Operations, a subcontractor of Milan-based Dior Manufactures, which produced leather goods on behalf of the French luxury house. In June, the Italian courts accused the workshop of being a “front for a company that exploited workers”.
However, this subcontractor passed two inspections, one environmental and the other social, during the year 2023. Controls passed with flying colours. Which raises questions about the viability of the audit systems of these luxury companies.
In its investigation, Reuters explains that the luxury companies targeted, such as Dior and the LVMH group more generally, did not respond to interview requests. The press agency specifies, however, that some shareholders of the LVMH group have called for more effective control of subcontractors and especially of the working conditions they offer their employees.