At the center of the operation of the Carabinieri of the Labor Inspectorate Unit of Milan are the relationships between Manufactueres Dior srl and its suppliers: thus the Dior bags cost the company 56 euros and were resold for 2,600 euros.
We produce bags and other accessories Dior brand in some Chinese laboratories in Lombardy, at very low costs and exploiting workers. The originality of these products is not in question: the documents ascertain it and the workers confirm it. But what lies behind the manufacturing of luxury goods by Dior has nothing to do with the glitter of elegant shop windows. How did exploitation take place in Chinese factories? And how did Manufactures Dior Srl, placed under administration by the Court of Milan, benefit from it?
What company is Manufactueres Dior srl
The police discovered that the production of Dior-branded leather goods took place in the company Leather goods Elisabetta Yang and at the New Leather: here are the working conditions”they were such as to integrate the extreme illicit exploitation of labor“. At the center of the investigations, which led to the administration of Manufactueres Dior srl, there are the relationships that the company maintained with its suppliers.
The company Manufactueres Dior srl (a limited liability company with sole shareholder) was established in 2006 and is subject to the management and coordination of the group Lvmh Moet Hennessy Louis Vuitton se – Paris Lvmh. The Christian Dior group based in Paris is the company’s only client: this means that the economic performance of the company is therefore closely linked to the dynamics of the markets in which the Dior Group is inserted. Manufactueres Dior srl has a single shareholder who identifies with the company Christian Dior Italia Srl.
“Dior bags cost 56 euros and are sold for 2600”: what the police investigation reveals
What happened in the Chinese laboratories where Dior bags were produced
Workers producing Dior-branded leather goods were allegedly exploited. The Carabinieri documented this last March when they entered the laboratories in Opera, in the province of Milan, of Pelletteria Elisabetta Yang Srl: 23 people were working inside (17 Chinese and 5 Filipinos and some of whom were paid illegally). ). In the building the police discovered that the offices, created to manage the administrative part of the company, were actually states illegally converted into rooms, complete with kitchen, where the workers lived. Here the military specified that “the hygienic conditions border on the ethical minimum“.
However, not only were the rooms for the night at the limit of survival. Working conditions during the day were even worse. In fact, the 23 workers produced leather goods using equipment in which the safety devices had been removed: devices that would prevent – as stated in the Court documents – “that the worker while using them can come into contact with the electrically moved mechanisms or that pieces of the ground product can be projected into the operator’s eyes“.
So why decide to remove these devices? Pelletteria Elisabetta Yang Srl by removing the production devices guarantees “an increase in the operator’s production capacity to the detriment of his own safety, being exposed to a high risk of injury“. And again: the containers of chemical and flammable substances they were not kept correctly, with high danger in the event of fire. The investigations also revealed that the working hours were much higher than the 8 hours per day as required by the contract. Hence the shadow of gangmastering in these laboratories.
Under these conditions the workers produced the bag Dior Po312yky at a cost of 53 euros, the same was then sold in the elegant shop windows of 2,600 euros. During the inspections of the Pelletteria Elisabetta Yang Srl spaces, the police also found an employee of the Manifatture Lombarde srli.e. the company to which the production of designer accessories had been contracted Armani and ended up in the papers of the Court of Milan which had ordered the judicial administration for Giorgio Armani Operations Spa. The employee had specified to the military that he was in that company for a courtesy visit, being on holiday. During the inspection, the carabinieri had also spoken to two sisters who worked in the leather goods industry who had reported that they previously worked for a company in Rozzano, on the outskirts of Milan, where Giorgio Armani bags were sewn. Another worker declared that he had worked for two luxury fashion brands: he now produced Dior bags which, depending on the model, were produced at a cost ranging from 35 to 70 euros.
At the end of the inspections, the public prosecutor entered the legal representative and her husband in the register of suspects, as the de facto manager of Pelletteria Elisabetta Yang Srl.
Investigations also took place in other companies that produced Dior products
The investigations also took place in the company New Leather Italy srls. When the police arrived at the laboratory they immediately saw some people climb over the fence wall and try to escape. But they stopped them shortly after.
Also in this case a space, which according to the land registry was supposed to be a warehouse, was used as a refectory and kitchen for the workers. The premises also “they presented themselves in unhealthy conditions below the ethical minimum“. And even in these laboratories the machinery used for production no longer had protective devices, thus increasing the risk of injury for the operator.
The sole director of the company was also present inside the warehouses of the New Leather Italy Srls company Davide Albertario Milano Srl, to which the police asked the reason for her presence. As the Court documents explain, the woman “he said that his company produces leather goods for various brands, among which the most important both in terms of brand and turnover is Dior. He stated that he outsources part of the work to external laboratories to reduce order processing times“.
The public prosecutor entered the sole director, the de jure manager and the de facto manager of the company in the register of suspects New Leather Italy srls because they are there “clear indicators of a production activity with illegal staff, in dangerous and abusive work environments, with working hours far in excess of those contractually foreseen”.
The non-existent company that produced under the Dior brand
Other checks were carried out in the company Davide Albertario Milano Srl which has Manufactures Dior Srl as its main customer and for which it produces leather travel bags and accessories. On paper, Davide Albertario Milano Srl would make use of an accredited sub-supplier, the company Az Operations Srl. However, from what was explained by the public prosecutor, “it is clear that the company Az Operations Srls, despite being securitized active, is in fact non-existent. The company has received the processing of the Dior product as a subcontractor from Davide Albertario but, in reality, the processing of the product is carried out by the New Leather Italy factory under cost compression, with irregular labor and in work environments below an ethical minimum“.
It’s still: “Az Operazions Srls represents a mere pool of workers who, once hired, are employed by secondment directly at Davide Albertario Srl, thus leaving the salary, contributions and insurance costs to be borne by the seconding party and, therefore, thus reducing labor costs for Albertario; the latter then outsources part of the production of the Dior brand to the shadow company New Leather Italy Srls at costs far lower than those borne by the client itself. In order to represent a production that is not actually carried out, given the non-existence of a production site, Az Operations Srls issues invoices to the client Albertario which are in concrete terms invoices for non-existent operations“.
Because the administrators of the subcontractor companies were acting
The entrepreneurs now included in the register of suspects for exploitation of workers acted with the aim of reduce labor costs. For this reason they were completely evaded direct taxes relating to employee costs (contributions, accident insurance; think of illegal workers). “Furthermore, all costs relating to safety, both of employees and of the working environments, were completely omitted, as the omission of workers’ medical visits, training and information was also noted”.
“The danger to worker safety is then increased by removal of safety devices from machines as well as not by the correct storage of chemical and flammable materials. A further indicator of worker exploitation is represented by the employees’ housing conditions, which appear degraded and unhealthy and expose the workers to certainly unconventional working rhythms”.
