Two years, 27 brands: what has actually been found in the “Made in Italy” supply chain

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 its 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. Those cases have since been closed after the court was satisfied the necessary changes had been made. Prosecutors did not stop there: the investigation has since expanded to 22 additional brands.

The latest wave includes Chanel, Moncler, Bvlgari and Brunello Cucinelli. None have been placed under court administration or directly accused of wrongdoing, but prosecutors have requested governance documentation to support investigations into subcontractors. All brands that responded said they are cooperating and have mechanisms to weed out unethical practices.

Prosecutors started with the most serious allegations, citing Italy’s Anti-Mafia Code. In most cases, court documents cited evidence of forced labour and factories outsourcing excess production to Chinese-owned factories with exploitative conditions, several breaching health and safety codes and violating employment laws. The brands moved swiftly to distance themselves and strengthen supply chain controls.

The second phase, in December 2025, named a further 13 brands over 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 the allegations related primarily to suppliers’ exploitation of workers, most of them Chinese or of Chinese descent.

Adidas insisted the investigation was not a direct one: “Adidas itself is not subject of the investigation. Neither we nor our Italian suppliers have any business relationship with the company under investigation. We are cooperating fully with the Italian authorities.” Coccinelle said it immediately began gathering the requested documentation and reaffirmed “its continued commitment to ensuring compliance with the law and the highest ethical standards.”

Investigations proceeded on the basis that brands did not know what was going on — that the products had been subcontracted beyond their purview. One allegation bucked that trend. In October 2025 the prosecutor in charge, Paolo Storari, requested a six-month advertising ban for Tod’s, claiming the brand knowingly benefited from illicit subcontractors generating “huge profits by exploiting heavily underpaid Chinese laborers.” Three senior executives were investigated alongside the company. In February the hearing was postponed; if Tod’s is found to have made sufficient progress the ban request may be withdrawn. Tod’s denied the allegations.

The most recent probe concerns subcontractors making luxury packaging — garment bags, dust bags, shopping bags and pouches. Inspections at Milanese manufacturer Moda Fashion Styles and Varese-based subcontractor Isacco revealed more employees of Chinese ethnicity working under exploitative conditions.

Official documents reveal that Moda Fashion Styles employed undeclared workers without residency permits; machinery lacked required safety mechanisms; workers were housed amid degrading living conditions; electricity consumption records indicated production throughout the entire day, including public holidays; and labels reading “Made in Albania” were found on-site. The company has no direct relationships with the brands involved, but prosecutors found evidence of their products being made there. They also unearthed invoices for the work issued by Brandart — which does have direct relationships with Owenscorp Italia (parent of Rick Owens), Chanel, Brunello Cucinelli, Goyard Italie and Moncler.

Brandart said it had been asked to cooperate by providing information and supporting documentation on the monitoring of certain suppliers, which “reaffirms its ongoing commitment to monitoring and overseeing its supply chain in accordance with the highest compliance standards.”

There are systemic causes behind it. The process began as pressure mounted for Italian companies to comply with incoming EU regulations on traceability and supply chain due diligence. Fashion was a clear place to start: a key export with one of the most complex and notoriously opaque supply chains.

The first issue is subcontracting, whereby orders are outsourced to smaller players subject to less scrutiny from brands and auditors. Regulatory pressure has pushed some brands to streamline supplier bases and tighten controls, but many still lack that oversight.

The second is forced labour, 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. The system has a long history of recruiting undocumented labourers, withholding portions of their wages and placing them in exploitative conditions. Undocumented immigrants are particularly vulnerable, adds UCL lecturer Roya Derakhshan.

In Italian fashion supply chains the conversation tends to home in on Chinese immigrants, many working in Chinese-owned factories across Italy. The phenomenon started at the end of the 20th century, when globalisation opened the floodgates to cheaper labour and to larger, more industrialised factories; at the same time many Italian factory owners realised their children did not want to take over, so an influx of Chinese business people looking to buy pre-built factories seemed like a “win-win,” explains Politecnico di Milano associate professor Hakan Karaosman. Many factories brought in Chinese workers to keep orders flowing, some undocumented or there under duress. Some follow local legislation; others have been accused of bending the rules — as the probe has laid bare.