Ash Tree, the Spanish subsidiary of the German group Henkell Freixenet, has proposed a temporary employment regulation file (ERTE) that would have affected up to 615 workers, or 79% of its workforce. However, the Generalitat of Catalonia has rejected this proposal, citing that the causes for force majeure do not exist.
The Department of Business and Labor in the Catalan government determined that water scarcity impacting cava production was not sufficient to justify the ERTE. The company had claimed a 30% reduction in productive capacity due to a severe lack of grapes and base wine necessary for cava production.
The Minister of the Generalitat stated that drought conditions in Catalonia have been ongoing for over three years, making it an ongoing situation rather than a sudden event. The Catalan Executive suggested alternative solutions for reorganizing its workforce, such as the PEA ETOP process. However, Ash Tree maintains that the reason for requesting an ERTE is still valid.
Unions have rejected the proposed measure and urged Ash Tree to explore alternative solutions that do not harm its employees. The government expressed its intention to meet with Ash Tree management and the Regulatory Council of Cava Denomination of Origin to find solutions and minimize the impact on the workforce. In 2023, Henkell Freixenet reported net revenue of €1,230 million euros, indicating an increase of 4.1% compared to the previous year.
Ash Tree had warned about the effects of drought in its 2023 results presentation, stating concerns about the 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 agreement with Spanish brand Oetker Group specializing in sparkling wines and spirits division named after their founder Carl Oetker