Ethics in Production: Loro Piana

Loro Piana’s Boat-Neck Cable Knit Sweater made from 100% Vicuña wool is $11,075

What is the real cost of this fiber?

In an article by Bloomberg, written by Marcelo Rochabrun and published on March 14, 2024, titled Loro Piana’s $9,000 Sweaters Rely on Unpaid Farmers in Peru. Marcelo Rochabrun aims to raise awareness among consumers about the practices of luxury fashion brands such as Loro Piana, a luxury fashion brand known for using high-quality raw materials like wool since its 1924 establishment in Northern Italy under LVMH. Highlight the process of cultivating products such as vicuña wool and its impact on the Lucana people in the Peruvian Andes. The article encourages consumers to reconsider their support for such brands and to be more aware of the origins and practices involved in product collection.

Overview

Rochabrun provides valuable insights into the historical practices of cultivating vicuña wool, focusing on various issues that impact the indigenous population in the Province of Lucanas.

In the early 2000s, Alfonso Martinez, who regulated the vicuña market, assisted Loro Piana and later assumed the role of Chief Executive Officer for their Peruvian operations in 2007. Loro Piana secured a dominant position in the market and had been granted a monopoly on the camelids from Peru’s government, which gave them a commercial agreement for the vicuñas. In 1995, Peru permitted the indigenous communities the right to shear and sell vicuña fibers if the animals were found in their territories. Due to historic restrictions on who could wear and produce the vicuña’s fibers, as well as strict rules on the trade, the locals were uncertain about their permission to use the material.

The production of vicuña fiber has proven demanding because of its short length and diameter, making it difficult and costly for locals to engage in its production and use. Loro Piana exploits a law permitting Peruvian communities to work for free in the round-up of the vicuñas, leading to the exploitation of the locals. The company owns 4,942 acres of land, which they were granted the rights to shear vicuñas in 2010. They shear the vicuñas every two years, at a faster frequency than usual. This practice has led to a significant decrease in the average wool weight per animal by 3.53 ounces over the past thirty years, more than halving their original wool weight. The sale of sweaters crafted from this luxurious ‘fibre of the gods’ by Loro Piana at $9,000 USD raises concerns about the disparity in the payment to villagers who receive a mere $280 USD per sweater, especially given the historical near-extinction of the vicuñas.

Peru’s History

Peru adopted a presidential republic in 1993, but it has faced repeated instability since the arrest and removal of President Pedro Castillo in December 2022, following allegations of corruption and mismanagement. As of March 2024, reports indicate that Peru's democracy is deteriorating due to the ongoing impacts of President Pedro Castillo's removal, leading to increased censorship and political unrest. Worker strikes in Peru, particularly by the Machu Picchu Popular Collective starting on January 25, 2024, have significantly impacted various sectors of the economy, including tourism, railway transportation, and manufacturing. In late 2020, notable protests by farmers in Peru demanding better pay escalated into deadly confrontations. Subsequently, new agrarian laws were enacted in 2021, increasing hiring costs, agricultural bonuses, and the minimum wage.

Peru possesses mineral reserves such as gold, copper, zinc, and silver, but their full exploitation is hindered by challenging terrain, including remote locations and difficult access to mining sites. Peru boasts a diverse industrial sector, producing petroleum, textiles, processed foods, steel, chemicals, and fertilizers, contributing significantly to the country's economic output. While Peru's once significant farming industry has declined in recent years, they still cultivate sugarcane, rice, fruits, corn, and cotton. Peru's primary exports, including copper ore, refined copper, petroleum, and gold, play a vital role in the country's trade relationships with major partners such as China, the United States, Japan, Canada, and South Korea, contributing significantly to Peru's economy.

According to the U.S. Department of State, in 2022, there were significant reports of human rights issues in Peru, including unlawful killings, restrictions on freedom of expression, government corruption, and gender-based violence, leading to increased social unrest and distrust in the government. Peru’s poverty rate reached 27.5% in 2022 and 51% of the population was suffering from moderate or severe food insecurity in 2021.

Thoughts

The content of this article did not come as a surprise to me, as consumers, it's common to overlook situations like these and become desensitized to the realities behind textile manufacturing. I was mostly taken aback by Rochabrun's painting a barbaric picture of the process that occurs in shearing and letting go of vicuñas. These practices are cruel to both humans and animals, showcasing the lingering effects of historical cultivation and the near-extinction of these camelids. When it comes to higher-end brands that pride themselves on high-quality products, there is always an expectation in place that they will do better simply because they can do so, it’s disappointing to see on multiple fronts how they fail to ethically succeed.

Peru has labor laws set in place that should ensure that the employees are getting compensated correctly for their hours with either fixed or indefinite contracts. However, Rochabrun's article points out that as of 2018, 41% of the Lucanas Village population was living in poverty, something that should be prevented by Peru’s labor laws. Their labor law infringements meshed with ethical troubles can easily cause a negative view of Loro Piana. As Loro Piana expands, there is persistent exploitation of both the employees and products, leading to decreases in wool weight due to rapid turnaround times and further negative impacts on local workers.

If Peru reviewed the regulations that facilitate companies’ exploitation of citizens, communities would greatly benefit however, this is unlikely. Given the growing emphasis on sustainability and corporate responsibility, consumers have the power to actively drive positive changes in brand operations. It raises the question, of how much do luxury consumers care about ethics in their products.