Freixenet, the world’s leading sparkling wine producer, is facing challenges due to a prolonged drought in Catalonia. The region has been experiencing extreme water shortages for almost three years, leading to the death of vines and withered grapes in wine-growing areas like Penedès near Barcelona, where Freixenet is located. The ongoing drought is threatening the production of its famous Cava sparkling wine.
In response to the crisis, Freixenet has applied for temporary lay-offs for more than 600 employees, representing almost 80 percent of its workforce. The company’s goal is to preserve jobs and navigate through the difficult situation caused by the drought. The plan has been presented to authorities and unions, with implementation scheduled for May. The company has not specified how long the lay-offs will last, noting that it will depend on the season and drought conditions.
The drought in Spain has impacted not only Freixenet but also the entire sparkling wine industry in the country. Grape harvests for Cava are expected to decline by more than 45 percent in 2023, resulting in a significant loss of production. Despite these challenges, Freixenet’s parent company, Henkell & Co., reported record revenues last year. The group has been able to navigate through the difficulties caused by the grape shortage and increased costs by exploring new markets and adapting viticulture practices.
While the drought has posed challenges for production, Freixenet sees opportunities in other markets as well. A shift in viticulture has been noted with more modest wine growing in England benefiting from the water shortage which could lead to an increase of demand for English sparkling wines. Despite
