How Migrant Workers Endured Hardship to Create the ‘Made in Italy’ Luxury Label by Reuters

By Emilio Parodi, Elisa Anzolin, Denis Balibouse, and Mimosa Spencer

PRATO, Italy/GENEVA – "Made in Italy: shame in Italy," chanted a small group of migrant laborers from Tuscany’s renowned leather industry last week in Geneva. They gathered outside Montblanc’s flagship store, brandishing placards with the same message.

The protesters stood approximately three kilometers away from a meeting where Montblanc’s parent company, Richemont, was engaged with shareholders. Alongside Italian and Swiss union officials, they accused the luxury accessory manufacturer of severing ties with its supplier, Z Production, last year due to rising costs.

According to the workers and union leaders, Z Production, which is owned by Chinese interests and located in Tuscany, had made significant improvements to working conditions in October 2022 after years of unstable contracts and excessive hours.

"Montblanc ended the contract because we wanted to work eight hours a day, five days a week, as legal workers," stated 23-year-old Zain Ali from Pakistan. He had spent two and a half years applying Montblanc logos to leather goods. "They just wanted slaves," he added.

Z Production did not respond to inquiries regarding the matter. Montblanc clarified that it opted to terminate its contract with Z Production in early 2023 after audits revealed the contractor failed to meet its supplier standards as dictated by Richemont’s code of conduct.

Recent investigations by prosecutors unveiled sweatshop-like conditions at 16 workshops near Milan, where products for luxury brands such as Dior and Giorgio Armani were manufactured, according to court documents examined. Interviews conducted by journalists with several supply chain workers, union leaders, non-profit organizations, local officials, and industry insiders revealed that egregious working conditions are prevalent within the luxury supply chain in Tuscany as well.

It was reported that Z Production and other workshops had employed undocumented migrants without prior leather-working experience to create luxury items for Montblanc and other high-end brands, indicating that issues in the supply chain extend beyond just Milan.

Alessandro Lessi, a 53-year-old former delivery person at Z Production, shared that he was the only Italian employee in a large workshop where migrant workers frequently endured long hours. "I left at 6 PM, but everyone else stayed on," he recounted. Most of his colleagues hailed from China, Pakistan, or Bangladesh, as the company aimed to keep costs low. "It’s very common here in Tuscany. The big brands dictate the prices to the contractors," he added.

This year, Italian courts placed Alviero Martini Spa, Giorgio Armani Operations, and Dior’s Italian manufacturing division into judicial administration for one year, with judges set to review whether the companies have remedied their labor shortcomings after this period.

In July, LVMH, the parent company of Dior, announced plans to enhance supply chain audits and oversight, committing to a more hands-on production strategy. The Armani group claimed it had always implemented measures to minimize abuses within its supply chain, while Alviero Martini asserted that it was unaware of any unauthorized subcontracting or worker exploitation.

Italian prosecutors are currently investigating the supply chains of around a dozen additional fashion brands, with specifics remaining undisclosed due to the ongoing nature of the investigations.

THE HIDDEN TROUBLE IN LUXURY

The appetite for rare, exclusive items has propelled LVMH into one of Europe’s largest corporations, valued at over 300 billion euros, and has catalyzed rapid expansion within the luxury sector. To manage fluctuating demand, brands often rely on a network of contractors and subcontractors.

In Tuscany’s textile hub of Prato, undocumented migrants like Abbas and Arslan Muhammad have recounted their years of labor in workshops supplying luxury brands. Abbas, a 32-year-old welder from Pakistan, arrived in Italy in 2015 and began working at a Chinese-owned workshop without a permit, enduring punishing hours standing while crafting bags and other leather accessories.

"My legs hurt so much, I couldn’t sleep at night," he said, recalling a monthly income that hardly compensated for the extensive hours. With the aid of a local union, Abbas finally secured a regular contract in 2022 that significantly improved his conditions. Arslan, a 27-year-old Pakistani who has worked in the same sector since 2017, similarly described the grueling hours and lack of time for personal care due to the demands of lengthy shifts.

EXPOSING ILLEGAL PRACTICES

The Milan court documents highlighted that luxury brands frequently delegate production to a primary subcontractor, who may then assign the actual work to another workshop. This latter workshop often operates with minimal oversight or adherence to labor standards.

The Milan prosecutors noted substantial entrenched illegality, viewing it as part of a broader profit-driven business model. With Italy responsible for 50% to 55% of global high-end goods production, monitoring the luxury supply chain is particularly challenging.

Carlo Capasa, chairman of the Italian Fashion Chamber, commented that managing oversight is daunting. "An average brand has around 7,000 suppliers; factoring in sub-suppliers pushes that number even higher. It’s clear that some are avoiding scrutiny," he lamented.

Recent inspections by the Italian Carabinieri have prompted some contractors to re-evaluate practices, while some suppliers are reportedly relocating production to areas outside of the inspection zones.

Antonio Franceschini of the Italian CNA Federmoda lobby group expressed concern that adhering to proper contracts and environmental regulations in such a competitive industry inevitably incurs costs. For instance, one contractor was noted to charge Dior as little as 53 euros per handbag, despite the retail price being 2,600 euros—underscoring the risks posed by underpayment and hazardous working conditions.

In conclusion, as the luxury sector continues to thrive, the need for ethical labor practices and oversight in the supply chain has never been more pressing, with industry experts warning of escalating potential for worker exploitation alongside the pressure to cut costs.