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Business News/ News / UPDATE 1-Cava producer Freixenet plans to furlough 80% of workforce due to drought
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UPDATE 1-Cava producer Freixenet plans to furlough 80% of workforce due to drought

CLIMATE-CHANGE/CAVA-FREIXENET (UPDATE 1, PIX):UPDATE 1-Cava producer Freixenet plans to furlough 80% of workforce due to drought

UPDATE 1-Cava producer Freixenet plans to furlough 80% of workforce due to droughtPremium
UPDATE 1-Cava producer Freixenet plans to furlough 80% of workforce due to drought

(Adds explanation of temporary layoff schemes in paragraph 5,)

MADRID, April 22 (Reuters) - Spanish cava producer Freixenet has presented a plan to lay off temporarily 615 workers, nearly 80% of its workforce, due to a drought in the Penedes area of Catalonia, it said in a statement on Monday.

The measure is expected to become effective in May, and the company did not specify how long the layoffs would last.

This makes Freixenet one of the first companies in Catalonia to respond to the region's worst drought on record with a layoff plan. The company has presented the plan to Catalan labour authorities and submitted it to the workers' unions.

As the impact of fossil-fuel driven climate change intensifies across southern Europe, drought since 2021 has caused a shortage of grapes. Last year this was acute in the company's home area of Penedes, the cava producer said.

Under Spain's ERTE law, companies that are facing exceptional circumstances can temporarily lay off employees or reduce their working hours.

"The measure ... is aimed at guaranteeing the viability of the business and preserving employability in order to face external causes and force majeure caused by the severe drought," Freixenet said.

Unions representing the workers did not immediately respond to a request for comment.

Vineyards across Catalonia's renowned Penedes cava-producing region are so parched that the roots of 30-year-old vines have died, leaving shrivelled red and green grapes languishing under the intense sun. (Reporting by Jesús Aguado; editing by Aurora Ellis and Cynthia Osterman)

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Published: 23 Apr 2024, 01:40 AM IST
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