Leading Spanish cava producer Freixenet is laying off 24% of its workforce, it has emerged.
The company made the announcement this week, citing a years-long drought that has seen grape production fall by up to 45% since 2022.
The lay offs affect Freixenet SA and Segura Viudas SAU, but not the commercial side of the business, the firm said.
It means out of a total of 738 employees, up to 180 will be made redundant in the coming days.
The historic company, based in Sant Sadurní d’Anoia, Catalonia, said it has been forced to restructure due to ‘particularly severe’ droughts in the Penedes growing region since 2020.
‘The extreme weather patterns and long-term consequences of the ongoing, multi-year drought in Catalonia have created severe disruptions in the industry, pushing the cava sector into an unprecedented crisis,’ Freixenet said.
The company said reduced reserves and rising raw material costs have exacerbated the mismatch between market demand and operational sustainability.
The number of employees no longer match the ‘reduced production levels’, the firm said, saying it must align its operations ‘with market reality.’
The decision comes after the Catalan government declared the end of the drought earlier this month, although experts said it was the worst for 200 years.
And while it is over, Freixenet said its impact will persist for some time given that cava production is a long-term process.
Henkell Freixenet, the sparkling wine company owned by the German group Geschwister Oetker, which controls half of Freixenet, recorded a turnover of €1.23 billion in 2023 (latest available data), 4.1% more than in 2022.
Trade union leaders said they were ‘surprised’ by the layoffs, branding them ‘unfair and unacceptable’.
Members of the CC.OO union are expected to stage protests over the measure on May 1.
Representative Antonio Dominguez said workers had been more concerned about the tariffs announced by Donald Trump, given that it has been raining for three straight months in Catalonia.
The CCOO has asked Freixenet to negotiate solutions that don’t involve layoffs.
