Armani and Dior under investigation by Italy authorities

Italy's Armani Group as well as France's Dior were placed under investigation for the second time this year by the Italian competition watchdog AGCM and the Guardia di Finanza financial police, authorities confirmed on Wednesday.

Officials said inspections were carried out on Tuesday at both companies' Italian headquarters.

Armani has come under fire from authorities for allegedly lying to consumers about its social commitments as well as the craftsmanship of its pieces. Armani pieces often retail for many thousands of euros, partly on the understanding that they are made by skilled artisans working by hand.

Labor practices under review

Both companies are also being probed for their labor practices.

"In some cases the companies may have used supplies from workshops employing workers who would receive inadequate wages," AGCM said.

The staff, who are often actually employed by subcontractors, are also alleged to have worked "hours in excess of the legal limits and in inadequate health and safety conditions."

ACGM announced that it is also looking into possible violations of the consumer code in the way the companies promoted and sold clothes and accessories.

"In both cases, the companies may have issued untrue statements about their ethics and social responsibility, in particular with regard to working conditions and compliance with the law by their suppliers," it said.

The Armani group has issued a statement saying it is cooperating with authorities and looks forward to a "positive solution" to the investigation. The company believes the allegations have no merit.

es/rmt (AFP, Reuters)