Supply Chain: The Ongoing Probe Into ‘Made in Italy’, Explained

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 their 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. These cases have since been closed, after the court was satisfied that the necessary changes had been made. It sent shockwaves through the industry, but prosecutors didn’t stop there. In the years since, the investigation has expanded to include 22 additional brands.

The latest wave, announced late last week, includes Chanel, Moncler, Bvlgari, and Brunello Cucinelli, among others. None of these brands have been placed under court administration or directly accused of wrongdoing, but prosecutors have requested that they share governance documentation to support investigations into subcontractors. All of the brands that responded to a request for comment noted that they are cooperating with prosecutors and have mechanisms in place to weed out unethical practices.

Illicit subcontracting is plaguing the ‘Made in Italy’ supply chain and its reputation for high quality and ethics. As legislators look for ways to stamp it out for good, what part can brands play?

Prosecutors started with the most serious allegations, citing Italy’s Anti-Mafia Code, the national legal framework for preventing organized crime. In most cases, court documents called out evidence of forced labor and factories outsourcing excess production to Chinese-owned factories with exploitative conditions, several of which were found to be breaching health and safety codes, and violating employment laws. The brands involved responded swiftly to distance themselves from the incriminated suppliers and strengthen supply chain controls.

The second phase, in December 2025, named a further 13 brands due to 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, allegations related primarily to the suppliers’ exploitation of workers, most of whom were Chinese or of Chinese descent. In each case, the brands in question were ordered to supply additional documentation to the court; this investigation remains ongoing.

The latest wave of allegations concern subcontractors manufacturing luxury packaging, including garment bags, dust bags, shopping bags, and pouches. Recent inspections at Milanese manufacturer Moda Fashion Styles and Varese-based subcontractor Isacco revealed more employees of Chinese ethnicity working under exploitative conditions.

As these probes sweep up more luxury brands, we break down what’s been uncovered so far and what brands need to know.

The process began as pressure mounted for Italian companies to comply with incoming EU regulations related to traceability and supply chain due diligence. In Italy, fashion was a clear place to start, as a key export with one of the most complex and notoriously opaque supply chains.

It touched on several systemic issues. Firstly, subcontracting, whereby orders are outsourced to smaller players subject to less scrutiny from brands and auditors. While the regulatory push for supply chain transparency and traceability has pushed some brands to streamline their supplier bases and enforce tighter controls over subcontracting, many still don’t have this level of oversight.

Secondly, the issue of forced labor, which is 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 to find a potential solution. The caporalato system has a long history of recruiting undocumented laborers, withholding portions of their wages, and placing them in exploitative conditions. Undocumented immigrants are particularly vulnerable to this system, adds UCL lecturer Roya Derakhshan, whose research covers marginalized stakeholders in overlooked contexts.

In Italian fashion supply chains, this conversation tends to home in on Chinese immigrants, many of whom work in Chinese-owned factories that operate across Italy, commonly known as “Chitalia” factories. This phenomenon started at the end of the 20th century, when globalization opened the floodgates to cheaper labor abroad, as well as to larger, more industrialized factories that could meet production targets quicker and cheaper than domestic counterparts. At the same time, many Italian factory owners realized that their children did not want to take over the family business, so an influx of Chinese business people looking to buy pre-built factories seemed like a “win-win”, explains Politecnico di Milano associate professor Dr. Hakan Karaosman.

Many factories brought in Chinese workers to keep orders flowing, some of whom were undocumented or there under duress, leading to deep divides in local communities. While some Chitalia factories follow local legislation, others have been accused of bending the rules — as the probe has laid bare. In every phase of the investigation so far, Chitalia factories have played a prominent role.

The majority of the brands named in the second phase did not respond to requests for comment, but Adidas asserted that the investigation was not a direct one — it was a subcontractor being probed, and the brands were merely asked to provide additional documentation. “Adidas itself is not subject of the investigation. Neither we nor our Italian suppliers have any business relationship with the company under investigation,” a spokesperson for the brand said. “We are cooperating fully with the Italian authorities and supporting their investigation.” Likewise, Coccinelle said in a statement: “Together with the relevant internal functions, we immediately began gathering the requested documentation […] Coccinelle would like to take this opportunity to reaffirm, once again, its continued commitment to ensuring compliance with the law and the highest ethical standards across all corporate activities and throughout its supply chain, through its control and monitoring systems.”

Investigations proceeded on the basis that brands did not know what was going on — that the products in question had been subcontracted beyond their purview. But one allegation bucked this trend. In October 2025, the prosecutor in charge of the probe, Paolo Storari, submitted a request for Tod’s to face a six-month advertising ban, claiming the brand knowingly benefited from illicit subcontractors generating “huge profits by exploiting heavily underpaid Chinese laborers”. Three senior executives were being investigated alongside the company, under corporate liability legislation. In February, the hearing was postponed. Should Tod’s be found to have made sufficient progress improving these practices, the ban request may be withdrawn. (Tod’s denied the allegations when they were first aired, and said it has no further updates to share at this time.)

The most recent probe, focusing on luxury packaging, brings to light how pervasive exploitation is across every facet of fashion’s supply chain, all the way down to the manufacturing of dust bags.

Official documents shared with Vogue Business reveal that Moda Fashion Styles employed undeclared workers without residency permits; machinery lacked the required safety mechanisms; workers were housed amid degrading living conditions; electricity consumption records indicated production throughout the entire day, including public holidays; and labels bearing the wording ‘Made in Albania’ were found on-site. Moda Fashion Styles does not have direct relationships with the brands involved, but prosecutors found evidence of their products being made on-site, primarily luxury packaging such as garment bags, dust bags, shopping bags, and pouches.

What’s more, prosecutors unearthed invoices for this work issued by Brandart, which does have direct relationships with Owenscorp Italia (the parent company behind Rick Owens), Chanel, Brunello Cucinelli, Goyard Italie, and Moncler.

In a statement shared with Vogue Business, Brandart said it had been asked to cooperate with the authorities by providing information and supporting documentation concerning the monitoring of certain suppliers. The company said this “reaffirm[s] its ongoing commitment to monitoring and overseeing its supply chain in accordance with the highest compliance standards”, noting that “Brandart remains strongly committed to maintaining and continuously strengthening its governance framework and supply chain oversight, in line with the best industry standards.”

Chanel told Vogue Business that it had already been alerted to the claims on May 18, and had instructed its supplier, Brandart, to terminate its relationship with Moda Fashion Styles, which it did “with immediate effect”. Chanel said it is “committed to fully cooperating with the Italian authorities” and subjects its supply chain to “regular assessments, audits and controls”, applying “the highest standards of social and environmental responsibility”.

Then, on June 25, during another inspection at Varese-based subcontractor Isacco, prosecutors found evidence suggesting that the company employed undeclared workers without resident permits; machinery lacked safety mechanisms; and workers were paid on a piecework basis, in clear breach of collective labor agreements. Invoices show that Isacco was working on behalf of packaging manufacturer F. VL., which in turn held manufacturing contracts with Stefano Ricci, Bvlgari, Goyard Italie, Jacob Cohën, Brunello Cucinelli, and Etro. Jacob Cohën owner and creative director Jennifer Tommasi Bardelle issued a personal statement, noting that the brand “stand[s] unequivocally on the side of all workers” and “their dignity comes before margin”. She added that the exploitation in question occurred at a “third-party subsupplier”, “with no relationship with us and unknown to us”, and the brand will “pursue all responsible entities and individuals accordingly”.