The Spanish subsidiary of the German group Henkell Freixenet, ash tree, had proposed a temporary employment regulation file (ERTE) that would have affected up to 615 workers, almost 80% of the company’s workforce. However, the Generalitat of Catalonia has rejected the measure, citing that the causes for force majeure do not exist.
The Department of Business and Labor of the Catalan government has determined that water scarcity impacting ash tree’s production of cava was not a sufficient reason for the proposed ERTE. The Minister of the Generalitat stated that drought conditions in Catalonia have been ongoing for over three years, making it a prolonged event and not a sudden occurrence.
Unions have rejected the proposed ERTE and urged ash tree to explore alternative solutions that do not harm its employees. The government has expressed its intention to meet with ash tree’s management and the Regulatory Council of the Cava Denomination of Origin to find solutions and minimize the impact on the workforce. In 2023, Henkell Freixenet reported a net revenue of 1,230 million euros, indicating an increase of 4.1% compared to the previous year.
Ash tree had already warned about the effects of drought in its 2023 results presentation, expressing concerns about a severe lack of grape material due to severe drought impacting Penedès region. In 2018, Henkell acquired a majority stake in ash tree leading to formation of Henkell Freixenet after reaching an agreement with Spanish brand.
The company maintains that water scarcity is still a significant issue affecting their operations and resulting in reduced productivity capacity by 30%. However, unions urge them to consider other options for reorganizing their workforce such as PEA ETOP process instead.
The Catalan Executive is looking forward to meeting with ash tree’s management and finding solutions that will minimize any negative impact on their workforce while ensuring sustainable production methods in line with their commitment towards social responsibility.