Cava still sparkling despite Catalan unrest | Business | Economic and financial news from a German perspective | DW


Surrounded by mountains of vineyards, Sant Sadurni d’Anoia is the birthplace of Catalan cava, with more than eighty companies based in the small town 50 kilometers from Barcelona. Most of its 15,000 inhabitants depend on the wine industry for their work, with cava company headquarters on every corner.

Next to the city’s main train station is one of the most famous cava companies: Freixenet, a family business founded in 1914, but whose roots date back to 1861.

As was the case for several other companies, Freixenet threatened to move its headquarters out of Catalonia as the financial situation darkened in the post-referendum chaos a year ago. He later changed his mind, but for some it was a close call.

It was in fact a German transaction which made it possible to keep it in Catalonia. Henkell, the sparkling wine, wine and spirits branch of the Oetker group, has announced the acquisition of the shares of Freixenet (50.67%) following the approval of the European Commission.

Read more: In the Val d’Aran in Catalonia, nobody wants independence

Cooperation with a partner like Henkell, which has substantial global industry expertise, will help Freixenet maintain its identity and accelerate its international expansion, the company believes.

Following a capital increase by the honorary president of Freixenet, Jose Ferrer Sala, he and Jose Luis Bonet will hold 50% of Freixenet’s share capital, while Henkell will hold the remaining 50%.

According to company sources, “Freixenet is the world’s largest producer of cava and the largest Spanish exporter of beverages, with 79.6%”. This internationalization began in the 1980s and “Germany was a key country”.

But how did the Catalan referendum affect sales and the transaction itself?

Freixenet’s sources would only say that “the company was ‘pursuing its national and international expansion plans’, including investing around 10 million euros ($12 million) in Spain in the coming years.

Although Jaume Giro i Giro is a small producer, he sells bottles of cava to foreign countries such as Japan and the United States.

Media and boycott

But Freixenet is not the only company unwilling to provide further details or comment on the impact of the political situation on business. Codorniu, the second-largest cava producer, did not respond to DW’s requests for comment, while other companies provided neutral statements.

The employers’ and cultural associations linked to cava did not wish to be cited in this article either.

“The media coverage around cava due to the political unrest in the last quarter of 2017 undoubtedly affected what would have been a brilliant result,” said the DO Cava Regulatory Board.

The body includes winegrowers, producers and representatives of the Autonomous Communities of the Cava region and the Spanish Ministry of Agriculture. One of its functions is to ensure the prestige of its appellation and to promote cava.

“At the most important time for cava consumption, the media attention led to a boycott. As a result, the growth forecast made at the end of the summer had to be lowered, the overall growth of cava not ultimately being only 3%,” the body said in a report.

The report showed that over 252 million bottles of cava were produced in 2017.

Thirty years after the launch of DO Cava, the domestic market has grown by 1.4%, despite two boycotts, in 2005 and 2017, and the economic crisis from 2008 to 2015.

Street view of Sant Sadurní d'Anoia

Sant Sadurní d’Anoia is full of wineries. Juve y Camps started exporting in the 1980s and Germany is one of its main markets

The international market, the key to survival

According to DO Cava figures, the foreign cava market grew by 3.2 million bottles, reaching a figure of 162.2 million bottles in 2017. The EU bought 112.6 million bottles (+ 0 .7%) and Germany regained first place with growth of 10.5%.

Cava exports began in 1987 via a dozen companies, with 142 cava producers now exporting their sparkling wines to over 140 countries, including small producers.

Read more: Rival protesters clash in Barcelona days before Catalan referendum anniversary

“I sell cava in Switzerland, Belgium, Japan, the United States, Denmark and Sweden,” Ramon Giró of winery Jaume Giro i Giró told DW. His company produces 65,000 bottles a year, with exports accounting for 30-35%.

At national level, in addition to the Catalan market, it also sells in the Basque Country, Valencia and Andalusia. “Last year we had an increase of about 10%,” he said.

A vineyard near Sant Sadurní d'Anoia

A vineyard near Sant Sadurní d’Anoia. For a year, a cava has faced a boycott because it is a Catalan product

“A boycott? We hadn’t noticed. Sales of cava are increasing and this is balancing out with exports,” Antonio Dominguez of the Comisiones Obreras (CCOO) union told DW. “Not a single company closed or laid off workers,” he added.

The companies sell more bottles of cava every year but they say the profit is less than other products like prosecco,” the spokesperson said.

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