Freixenet Reaches Agreement to Cut Job Losses Amidst Ongoing Drought Challenges
The cava producer reduces planned layoffs from 180 to 154 workers following negotiations with unions, implementing supportive measures for affected employees.
Grupo Freixenet and labor unions have reached a significant agreement regarding the company’s previous plans to lay off employees as part of a redundancy plan initiated in April.
Initially, the cava producer from Sant Sadurní d’Anoia proposed the dismissal of up to 180 workers, accounting for 24% of its workforce at both Freixenet and Segura Viudas.
Following extensive negotiations, the finalized agreement will now affect 154 employees, representing 21% of the total workforce.
The main union, CC.OO., positively evaluated the deal reached in the early hours.
Workers had been on strike for several days to protest the layoff strategy.
According to the union, the agreement incorporates “non-traumatic measures” and outlines a plan to revive industrial activity.
Under the terms of the preliminary agreement, Freixenet will lay off 99 employees while Segura Viudas will see a reduction of 55 workers.
Preference will be given to voluntary departures and early retirements.
Workers under the age of 55 who opt for voluntary exit will receive severance pay equivalent to 50 days for each year worked, with no maximum limit.
Additionally, for employees over 55 years old with a minimum tenure of 10 years who meet early retirement criteria, a social plan has been established.
Freixenet will complement unemployment benefits for individuals aged between 55 and 63 with varying amounts based on age, subject to an annual increase of 2%.
Should the voluntary measures not suffice to reach the targeted number of layoffs, the company has set forth criteria for mandatory exits, which will include severance equivalent to an unfair dismissal claim, ensuring a minimum payout of 10,000 euros.
Younger employees will also have access to job placement services and a preferential hiring right for two years if new openings arise.
The company has asserted that the agreed plan marks a crucial step toward securing the long-term future of Freixenet while maintaining a deep connection to its regional roots.
Freixenet indicated that severe drought conditions in Catalonia between 2022 and 2024 have caused 'serious disruptions' in the sector, necessitating this redundancy plan.
Production of grapes has reportedly decreased by 45% in the Penedès region since 2022, drastically affecting the availability of raw materials and increasing costs.
The company highlighted that extreme climate patterns and the long-term consequences of ongoing multi-year drought have led to unprecedented crisis conditions within the cava industry.
Reduced reserves and rising raw material costs have further exacerbated the mismatch between market demand and operational sustainability.
The regional government announced the end of the drought, deemed the worst in 200 years, in early April.
This is not the first instance of Freixenet reacting to drought conditions.
A year ago, the company implemented a temporary employment regulation file (ERTE) affecting up to 615 workers due to water scarcity.
At that time, the regional government rejected the claim of force majeure, concluding that the drought was not an unforeseen event.
The company subsequently filed an ERTE under other provisions, which concluded in December.
Henkell Freixenet, the sparkling wine company controlled by the German group Geschwister Oetker, reported a revenue of 1.23 billion euros in 2023, an increase of 4.1% compared to 2022. During the financial disclosure, Pere Ferrer, co-CEO of Henkell Freixenet and vice president of the Freixenet group, expressed concerns about the challenges facing the company in 2024 due to the ongoing shortage of raw materials resulting from the water crisis.
Initially, the cava producer from Sant Sadurní d’Anoia proposed the dismissal of up to 180 workers, accounting for 24% of its workforce at both Freixenet and Segura Viudas.
Following extensive negotiations, the finalized agreement will now affect 154 employees, representing 21% of the total workforce.
The main union, CC.OO., positively evaluated the deal reached in the early hours.
Workers had been on strike for several days to protest the layoff strategy.
According to the union, the agreement incorporates “non-traumatic measures” and outlines a plan to revive industrial activity.
Under the terms of the preliminary agreement, Freixenet will lay off 99 employees while Segura Viudas will see a reduction of 55 workers.
Preference will be given to voluntary departures and early retirements.
Workers under the age of 55 who opt for voluntary exit will receive severance pay equivalent to 50 days for each year worked, with no maximum limit.
Additionally, for employees over 55 years old with a minimum tenure of 10 years who meet early retirement criteria, a social plan has been established.
Freixenet will complement unemployment benefits for individuals aged between 55 and 63 with varying amounts based on age, subject to an annual increase of 2%.
Should the voluntary measures not suffice to reach the targeted number of layoffs, the company has set forth criteria for mandatory exits, which will include severance equivalent to an unfair dismissal claim, ensuring a minimum payout of 10,000 euros.
Younger employees will also have access to job placement services and a preferential hiring right for two years if new openings arise.
The company has asserted that the agreed plan marks a crucial step toward securing the long-term future of Freixenet while maintaining a deep connection to its regional roots.
Freixenet indicated that severe drought conditions in Catalonia between 2022 and 2024 have caused 'serious disruptions' in the sector, necessitating this redundancy plan.
Production of grapes has reportedly decreased by 45% in the Penedès region since 2022, drastically affecting the availability of raw materials and increasing costs.
The company highlighted that extreme climate patterns and the long-term consequences of ongoing multi-year drought have led to unprecedented crisis conditions within the cava industry.
Reduced reserves and rising raw material costs have further exacerbated the mismatch between market demand and operational sustainability.
The regional government announced the end of the drought, deemed the worst in 200 years, in early April.
This is not the first instance of Freixenet reacting to drought conditions.
A year ago, the company implemented a temporary employment regulation file (ERTE) affecting up to 615 workers due to water scarcity.
At that time, the regional government rejected the claim of force majeure, concluding that the drought was not an unforeseen event.
The company subsequently filed an ERTE under other provisions, which concluded in December.
Henkell Freixenet, the sparkling wine company controlled by the German group Geschwister Oetker, reported a revenue of 1.23 billion euros in 2023, an increase of 4.1% compared to 2022. During the financial disclosure, Pere Ferrer, co-CEO of Henkell Freixenet and vice president of the Freixenet group, expressed concerns about the challenges facing the company in 2024 due to the ongoing shortage of raw materials resulting from the water crisis.
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