PRATO, Italy/GENEVA, Sept 18 (Askume) – “Made in Italy: Shame on Italy” was the phrase some migrant workers in Italy’s famous leather goods sector used to attack luxury accessories maker Montblanc last week, the slogan of the man in charge.
In Distance (CFR.S) Montblanc’s $76 billion parent Richemont Group
The Tuscany-based Chinese contractor will improve working conditions in October 2022 after years of irregular contracts and long shifts, workers and union officials told Askume.
“Montblanc terminated the contract because we were expected to work eight hours a day, five days a week as legal employees,” said Zain Ali, 23, from Pakistan. He worked for two and a half years at Z Productions, putting metal Montblanc logos on leather goods: “They just wanted slaves.”
Z Productions did not respond to a request for comment for this report. Montblanc said in a statement to Askume that it decided to terminate the contract at the beginning of 2023 after an audit found that Z Productions failed to meet the standards set out in Richemont’s supplier code of conduct.
Court documents reviewed by Askume showAn investigation by prosecutors this year revealed sweatshop-like conditions at 16 factories near Italy’s fashion capital Milan that make products for luxury brands Dior, Giorgio Armani and Alviero Martini.
Askume interviewed seven luxury supply chain workers and three union leaders, as well as several nonprofits, local officials and industry figures who said such poor working conditions also characterize Tuscany’s luxury supply chain.
Sources say Z Production and other workshops employ undocumented immigrants with no leather-making experience to produce luxury goods for Montblanc and other high-end brands, suggesting that supply issues for the line extend beyond Milan.
Alessandro Lacey, 53, who worked as a delivery boy at Z Production until 2022, said that as the only Italian in the large workshop he had a fixed-term contract but that migrant workers there worked much longer hours.
“I left at 6pm, but everyone else stayed back,” he told Askume. He said most of the workers working there are from China, Pakistan or Bangladesh because the company wants to keep costs low. “This is very common in Tuscany. It’s the big brands that impose prices on the contractors.”
A Milan court has placed Alviero Martini SpA, Armani’s industrial unit Giorgio Armani Operations, and Italian manufacturers Dior under jurisdiction for one year in January, April and June respectively.
According to court documents and judicial sources, judges will verify whether the companies have addressed the deficiencies and taken steps to prevent labor problems from recurring.
Dior’s parent company, LVMH, said in a speech in July that it planned to strengthen supply chain audits and investigations and that Dior would have more direct control over its production.
In April, the Armani Group said it “always takes controls and preventive measures to minimise abuses in its supply chain”. Alvero Martini said this month that he was unaware of unauthorised subcontracting and exploitation of workers.
Italian prosecutors are currently investigating the supply chains of about a dozen fashion brands, a person familiar with the matter told Askume in June, but he did not name the brands because the cases were ongoing.
The dirty secret of luxury
Consumer demand for rare and unique items has helped LVMH become one of Europe’s biggest companies with a market value of more than 300 billion euros ($330 billion), driving the rapid expansion of the luxury goods industry.
Brands rely on a range of contractors and subcontractors to ramp up production when demand is high, or quickly reduce production when demand is low.
Abbas and Arsalan Mohammed, a union official in the textile industry hub of Prato in Tuscany, came to Pakistan as undocumented immigrants and worked for years alongside dozens of immigrants in factories supplying luxury brands.
Abbas, 32, is a welder from Pakistan who arrived in Italy via the Balkans in 2015. There is no labour force.
“My job requires me to work 14 hours a day standing up,” said Abbas, adding that he works with about 50 Pakistani, Afghan and Chinese immigrants to make bags and leather goods for international luxury brands. He declined to identify the workshop for fear of retribution.
His job was to dye leather for bags made by various contractors, a skill he learned after arriving in Italy.
“My legs hurt so much I can’t sleep at night. I can’t go to the toilet, I can’t sit down,” said Abbas, who declined to give his full name or details of his current contractor for fear of losing his job.
Abbas told Askume the part-time contract earned him 600 to 700 euros a month and 400 to 500 euros in cash for overtime work. Francesca Ciuffi, an official with the SUDD Cobas union that helped organise the Geneva protests, said the practice was still common in workshops in Prato.
Abbas was fired from his first job due to health problems, but in 2019 he found work in the same industry in Prato.
He told me that for the next three years his working conditions were the same as at his previous factory. But in 2022, with the help of SUDD Cobas, Abbas and his colleagues secured a regular contract worth €1,400 a month.
Arsalan, a 27-year-old Pakistani immigrant who works for Z Production, said he worked long hours after arriving in Italy in 2017.
“When you work more than 12 hours a day, six days a week, you don’t have time to shop or even do laundry.”
Initially he worked without a contract and was then offered part-time employment. He told Askume that, like Abbas, he eventually received help from the union and a suitable contract from Z Production until 2022.
Illegal conduct exposed
Milan court documents say luxury brands often outsource production of their designs to major subcontractors, but that company may be little more than a shell with the ability to produce samples but limited manufacturing capabilities.
The actual work would be done by another shop, where costs would be lower and scrutiny of conditions and treatment of workers would be virtually nonexistent.
“During the investigation, it emerged that the illegal conduct was so widespread and deep-rooted that it was viewed as part of a broader business model focused solely on maximizing profits,” Milan prosecutors wrote in a June filing related to the Dior case.
Keeping track of what’s happening inside Italy’s vast luxury supply chain is challenging. Italy accounts for 50% to 55% of global production of high-end goods, according to data from consulting firm Bain.
“A brand has an average of 7,000 suppliers,” said Carlo Capasa, president of the National Fashion Chamber, a lobby group for Italian fashion brands. “If each supplier has two sub-suppliers, the number could be 14,000. I would like to see who can do 21,000 audits a year… It’s impossible, so clearly someone escaped (the controls).”
A judicial source who spoke on condition of anonymity told Askume that Italian carabinieri raids on the workshops had alerted the contractors and the case was still ongoing: inspections in the summer showed the contractor had not completed the work, at least that was what happened internally.
A senior investigation source told Askume that some suppliers have begun moving production to regions such as Veneto, Campania and Puglia, which are not currently the focus of the raids.
Antonio Franceschini of CNA Federmoda, an Italian lobby group representing artisans and small fashion businesses, said workers signing fair contracts and complying with environmental regulations is an unavoidable price in the highly competitive luxury goods industry.
For example, Milan court documents alleged that due to low wages and unhealthy working conditions, Dior’s contractor Pelleteria Elisabetta Yang SRL charged Dior only 53 euros per handbag, which retailed at 2,600 euros.
Dyer said it had cut ties with the supplier, which had only assembled a few bags.
However, industry experts warn that if a workshop offers work on expensive products at extremely low prices, as was revealed during the Milan prosecutor’s inspection, it is a danger signal for big brands because as production costs fall, workers are at risk of being laid off.
“Work compensation costs cannot fall below a certain level,” Franceschini said.
