Rock Center

ONLINE EXCLUSIVE

Three powerful words: "Made in Italy." They conjure up images of the great Italian designers: Dolce & Gabana, Prada, Valentino.



And as a brand, "Made in Italy" doesn't come cheap.



Customers pay 10, 20, or even 100 times more for a handbag or dress that's made in Italy, compared to one made in China. "Made in Italy" fashion and design is a $30 billion annual export business.

Buyers expect luxury cloth produced on the best machines, monitored by fussy Italians, who know their stuff. But there is another side to products branded "Made in Italy."

Rock Center visited a sweatshop in an old warehouse in Prato, the center of Italian textile production since the Renaissance, where Chinese workers are paid as little as $2 a day. Many of them are illegal. They work with cheap Chinese materials that are also often smuggled in.



What they produce gets labels that say "Made in Italy," put in boxes that say "Made in Italy."



What they're making isn't illegal. The Chinese aren't making knock offs, or fake purses. They're knocking off the entire "Made in Italy" brand name.

Italian law doesn't specify how much must be made in the country to be considered local. So if a few buttons are sewn on in Italy, Presto! It's made in Italy.

Click here to watch Richard Engel's exclusive online report 'Made in Italy.'