In a recent decision, the Generalitat of Catalonia has rejected the temporary employment regulation file (ERTE) proposed by ash tree, the Spanish subsidiary of German group Henkell Freixenet. The proposal, which would have affected up to 615 workers or about 80% of the company’s workforce, was rejected due to the lack of evidence for force majeure.
According to the Department of Business and Labor in Catalonia, the causes cited for force majeure do not exist. The company had claimed water scarcity as a reason for reducing its productive capacity by 30%. However, it is widely known that drought conditions in Catalonia have been ongoing for over three years, making it not a sudden event. The Catalan Executive has suggested that ash tree consider other options for reorganizing its workforce, such as PEA ETOP process.
Ash tree maintains that its request for an ERTE is still valid due to a severe lack of grapes and base wine necessary for cava production. However, unions have rejected this proposal and urged the company to explore alternative solutions that do not harm its employees. The government has expressed its intention to meet with Ash Tree management and Cava Denomination of Origin Regulatory Council to find solutions and minimize the impact on workers.
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 their 2023 results presentation, with concerns about a lack of grape material due to severe drought impacting Penedès region in 2018 when Henkell acquired a majority stake in Ash Tree leading to formation of Henkell Freixenet after reaching agreement with Spanish brand.