Drought disaster impacts Freixenet manufacturing « Euro Weekly Information

The Barcelona-based wine producer, Freixenet faces a dire problem and short-term layoffs as drought situations persist.

Freixenet, probably the most well-known names within the cava sector, has introduced a short lived employment regulation file (ERTE) affecting 615 staff efficient from Might 1.

The choice, pushed by extreme drought situations, was introduced by the corporate, now underneath the joint possession of the German group Henkell and the Ferrer household.

The discount in workforce displays the corporate’s strategic adjustment to a projected 30 per cent drop in manufacturing capability because of persistent water shortages in Spain’s El Penedes area. In 2023 there have been 80 million bottles much less for this similar cause.

Affect on manufacturing and income

The corporate, which noticed a income of €1.2 billion in 2023, marking a 4.1 per cent improve from the earlier yr, anticipates additional monetary turbulence.

In response to El Economista, Pedro Ferrer, co-CEO of Freixenet, expressed issues in regards to the ongoing drought affecting the area since 2021, with 2023 being significantly harsh.

‘The uncertainty attributable to the dearth of fabric grape derived from the extreme drought has been affecting us since 2021 and with particular affect in 2023 within the El Penedes space,’ Ferrer famous.

Trade response to drought challenges

To mitigate the affect of the drought, the DO Cava has taken proactive measures by establishing a fund to supply base wine as a reserve for future poor harvests, a method just like these in different well-known wine areas like Rioja and Champagne.

This measure goals to buffer the anticipated shortages and maintain the trade’s resilience in opposition to climate-induced challenges.

In abstract, Freixenet’s choice to implement the ERTE is a mirrored image of broader environmental and financial challenges that the wine trade faces.

With ongoing negotiations with the Generalitat’s Division of Enterprise and dialogue with unions, the corporate hopes to navigate via these testing instances whereas sustaining its foothold within the international cava market.