Giorgio Armani Pushes Back at Italian Competition Authority's 3.5M-euro Sanction

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a day ago

MILAN – The Giorgio Armani company is pushing back on the decision of the AGCM, the Italian Competition Authority, to fine the luxury brand for alleged misleading advertising.
The authority is imposing sanctions of 3.5 million euros on Giorgio Armani SpA and G.A. Operations SpA for deceptive business practice linked with the companies' sustainability statements on their Armani Values and armani.com websites, which the AGCM claims are contradicted by the uncovered evidence of negligence in supply chain auditing.
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The Italian brand said it will appeal the decision before the Regional Administrative Court.
Proceedings were initiated by the AGCM in July last year, three months after G.A. Operations SpA, the manufacturing arm of the Giorgio Armani Group, had been put into judicial administration by a Milan court for alleged negligence in auditing its suppliers whose subcontractors allegedly engaged in sweatshop schemes and workforce exploitation.
The probe was fully resolved and the judicial administration procedure lifted last February.
In Friday's ruling for sanctions, the Italian Competition Authority said that the 'investigation revealed that the companies placed strong emphasis on their commitment to sustainability — particularly social responsibility, including worker welfare and safety — which has become a marketing tool used to meet growing consumer expectations. This is evidenced, among other things, by the very name of the company website ('Armani Values') as well as by certain documents collected during inspections.
'These clearly show the objective of 'enhancing the brand's positive perception in terms of sustainability … and, from a commercial standpoint … encouraging customers to make purchasing decisions that also reflect the 'values' conveyed through our products',' the authority wrote.
In a responding statement issued Friday, Giorgio Armani SpA expressed 'disappointment and bitterness' at the decision of the Italian Competition Authority to conclude the proceedings initiated in July 2024 for alleged misleading advertising, resulting in sanctions against the companies.
'This decision disregards the decree by which the Court of Milan revoked, early, the judicial administration of G.A. Operations SpA, acknowledging that, after a thorough analysis of the control and supervisory systems long used by the Armani Group for its supply chain, 'the excellent result the Company is believed to have achieved was made possible – in a short timeframe — precisely because structured and tested supply chain control systems were already in place at the time the measure was applied',' it said.
The Italian luxury company added that throughout the AGCM investigation, it complied with the latter's requests but couldn't 'establish a constructive relationship with them to fully understand the reasons for its position.'
This development comes on the heels of a yearlong turmoil in the Italian high-end fashion supply chain which has faced allegations that it has frequently failed to uphold the principles of quality, work ethics and sustainability that the sector has long prided itself on.
Such allegations that have swirled in media reports and on social media follow recent cases of alleged workers' exploitation, abuse and sweatshop schemes in the Italian fashion supply chain.
The most recent links Loro Piana to sweatshop subcontractors that the brand failed to properly audit and follows earlier similar incidents for Valentino, Alviero Martini and Dior, in addition to Giorgio Armani. All brands have been put under judicial administration, with the latter two brands' probes fully resolved and the judicial administration procedures lifted.
Last week the president of Camera Nazionale della Moda Italiana Carlo Capasa got vocal on the topic, defending the country's high-end fashion supply chain against those claims and so did Confindustria Moda president Luca Sburlati and Confindustria Accessori Moda president Giovanna Ceolini.
Industry associations and trade unions are pressuring the Ministry of Enterprises and Made in Italy to define a country-wide mandatory protocol and policy to ensure the sector complies with fair work standards.
A fashion roundtable held last week at the Ministry moved the conversation forward, although no advancement is expected before the end of the summer.
As many of the claims of alleged work abuse have entailed companies based in the Lombardy region, the Milan Prefecture promoted in May a memorandum of understanding to tackle worker exploitation, undeclared work, tax evasion, and unfair contractual practices in the fashion supply chain.
Confindustria Moda, Confindustria Accessori Moda and Camera Nazionale della Moda Italiana were among other entities which undersigned the non-legally binding memorandum, which defines an action plan to tackle those issues.
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