ROME (AP) – Italy’s government on Thursday cleared a scandal involving a Christmas cake trade by an Italian influencer that authorities say misled consumers into believing the proceeds would be donated to charity. Significant fines were approved for insufficient product labeling.
The cabinet has approved a bill that would impose fines of up to 50,000 euros ($55,000) on manufacturers if they do not clearly indicate on their products what percentage of sales will be donated to charity.
Italy’s antitrust authorities recently fined fashion blogger-turned-influencer Chiara Ferragni 1 million euros for allegedly misleading consumers into believing that by buying the sweets, they were making a donation to an Italian hospital. ($1.1 million) and fined cake maker Barocco 420,000 euros.
Italy’s Industry Minister Adolfo Urso told reporters that the law would require manufacturers and professionals to include certain information on their labels, such as what percentage of their profits go to charity. He said he would make it mandatory.
“This way, consumers will be able to know for sure which part of their profits will go to the solidarity movement,” the minister was quoted as saying by Italian news agency Lapresse.
Italian media reported that Ferragni praised the cabinet’s actions in a statement, saying it filled a “legislative vacuum”.
“What happened to me made me realize how fundamental it is to regulate philanthropic activities combined with commercial activities with clear rules,” Ferragni was quoted as saying.
Mr. Ferragni and Barocco chairman Alessandra Barocco are also being investigated by Milan prosecutors on suspicion of aggravated fraud.
According to antitrust authorities, the cake maker made a one-time donation of 50,000 euros to a Turin hospital in 2022, before the launch of the Ferragni-branded Christmas cake, and made no further donations. The paper said Ferragni’s company earned €1 million to license her logo for the initiative, which caused Ferragni-branded cakes to sell for higher prices than usual.
The cake maker said it acted in “absolute good faith” in offering the special edition sweet, known as Pandoro.
Ms Ferragni said she believed the criminal investigation would prove she acted in good faith.
Since the Christmas cake scandal broke, a growing list of other transactions between the influencer and various companies has come under scrutiny.