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Latest Sweatshop Scandal Underscores Labor Issues with ‘Made in Italy’ Label

Italian police have arrested the owner of a company for allegedly employing dozens of undocumented workers to make leather goods for some of the world’s biggest luxury houses, Reuters reported Tuesday.

Vincenzo Capezzuto, head of Moreno Srl in South Naples, was placed under house arrest on charges of “illegal employment and abduction,” according to his lawyer.

Industry and investigative sources told Reuters that the workshop in Melito, an immigrant-rich suburb north of Naples, manufactured shoes and bags for companies such as Armani, Fendi and Saint Laurent. None of them confirmed a relationship with Moreno and Saint Laurent denied any business ties.

The case returns to the fore the questionable reputation of the “made in Italy” label, which was once considered the pinnacle of craftsmanship and sophistication but is increasingly marred by a growing shadow economy of exploited labor, including home workers who labor under the radar without social protections or right of legal restitution.

A search of Moreno’s workshop found 50-odd workers—including a pregnant woman and two teenagers—hiding in a store room “among rolls of leather and piles of shoes and bags,” Reuters said.

Capezzuto’s lawyer told Reuters, however, that small suppliers are “integral” to the industry, where underpayment by the leading fashion companies is par for the course.

“The manufacturing district around Melito is seen as China, where production is decentralized from European industry due to low costs and poor workers’ rights,” he said.

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He also denied the workers had been abducted and said they would be issued regular contracts.

As the New York Times explained in 2018, increased globalization pressures mean that the “assumption implicit in the luxury promise—that part of the value of such a good is that it is made in the best conditions, by highly skilled workers, who are paid fairly” is now under fire.

Prato in Tuscany is referred to as “Little China” for staffing its famed leather factories with Chinese immigrants—many illegal—who toil for poverty wages under sweatshop-like conditions. There’s also the gray area of products that are assembled, for the most part, in low-cost countries such as China or Malaysia and then shipped to Italy for the final embellishment of a buckle or strap. These, too, the Los Angeles Times noted in 2008, can “somewhat questionably bear” the “Made in Italy” label.

The global luxury goods market is currently worth roughly 276 billion euros ($305.86 billion), according to consultancy firm Bain & Company and Fondazione Altagamma, the Italian luxury manufacturing trade group.