Italy antitrust watchdog investigates Benetton franchising contracts

A logo of United Colors of Benetton is seen in front of a store in Rome

MILAN (Reuters) – Italy’s competition watchdog is investigating fashion retailer Benetton for possible abuse in two of its franchising contracts with independent retailers, it said on Wednesday.

The authority said it had carried out inspections in some Benetton offices on Tuesday with Italy’s finance police.

The regulator is looking into Benetton’s possible use of certain contractual clauses that favoured its (Benetton’s) needs rather than the franchisee.

It said the use of such a contractual framework by a company “managing a significant franchise network … could have a significant impact on all the entrepreneurs making up the network, thus penalising the competitiveness of the market.”

The Benetton group denied any wrongdoing and said it was confident it would be able to prove its relations with retailers were always managed correctly.

“Specifically, with reference to the matter currently investigated by the antitrust, the group’s correct behaviour and its rigorous respect of the rules has already been proved in court”, the statement said. Benetton gave no further details.

(Reporting by Maria Pia Quaglia, additional reporting by Elisa Anzolin. Editing by Jane Merriman)