Borjomi factories close in Georgia due to sanctions and workers' protest

Borjomi factories close in Georgia due to sanctions and workers' protest

In Georgia, Borjomi, the most popular mineral water in the country, may soon disappear from store shelves. The company has not been working for a month and a half. Firstly, because of the sanctions that were imposed on the Russian oligarch Mikhail Fridman for his involvement in the war in Ukraine: it was his company Alfa Group that has been the largest shareholder of Borjomi since 2013. Secondly, because of the staff strike. When both Georgian water bottling plants shut down production, management announced they would cut workers' salaries by 50% during the downtime. 49 workers refused new contract terms and were fired, and dozens went on strike and refuse to return to their jobs, NV reports.

Georgia closes “Borjomi”– factories due to sanctions and workers protest

Until recently, Fridman and his Alfa Group owned 57.72% of the shares of Borjomi, the rest was owned by the family of the late Russian-Georgian oligarch Badri Patarkatsishvili. Friedman came under EU and UK sanctions after the outbreak of the war in Ukraine due to his close ties to Vladimir Putin's administration. The other day, Alfa Group transferred part of its shares to the Georgian authorities and lost its controlling stake. This should bring the company and its exports out of sanctions. But so far the enterprise has not resumed work in full, including due to a strike of workers.

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Employees are dissatisfied with the fact that, under the pretext of sanctions, the management of the enterprise began a “reorganization” and within its framework, the main blow fell precisely on the grassroots and technical workers of the plant, and not on management. The strikers demand the reinstatement of laid-off workers, the payment of two months of wage arrears, and the transfer of all employees to long-term contracts that make it difficult to dismiss.

“The company employs 635 employees, of which about 60-80 people are directly workers, all the rest are top management,” explains Giorgi Diasamidze, chairman of the Trade Union of Agrarian Economy, Trade and Industry of Georgia. “Imagine there is about one boss for every worker. There you will see a manager almost for staplers, his deputy, and so on. The state is bloated. But the reorganization has affected loaders – those loaders who have to work in the summer to load cars under the sun in 45-50-degree heat. And then they fired these people, it was with loaders that this illegal reorganization began!

“We received letters from the management of Borjomi. Look: a person has been working at this place for 46 years, and now he receives a letter stating that he, it turns out, is performing his duties inefficiently! striker Andro Bablidze is indignant. – But this means that it is not this person who should be fired, but the company's management. That is, what happens, he worked inefficiently for 46 years, was lazy, but he was still kept? These are management questions! And with these stupid letters they caused great irritation among people!”

Trade unions also joined the strike of Borjomi workers. The head of the Trade Union of Agrarian Economy, Trade and Industry of Georgia, Giorgi Diasamidze, calls the dismissal of Borjomi employees illegal and calls on the Georgian authorities to influence the situation as soon as possible. Otherwise, according to him, the strikers will move the protest to Tbilisi.

Georgian authorities and private shareholders held talks on the redistribution of shares in the company, and recently Georgian Prime Minister Irakli Garibashvili announced the successful completion of a “free deal”: Alfa Group transferred 7.73% of the shares to the Georgian state. Thus, the controlling stake, including 50.01% of the shares, was jointly owned by the Georgian state and the Patarkatsishvili family.

“Part of the shares will be transferred to us free of charge, and after that our state will become a co-owner of our national wealth and pride, the Borjomi plant,” Garibashvili said. “And all the problems that Borjomi and its employees have in terms of operations, management and functionality, all these problems will be solved.”

Borjomi management itself calls the current crisis “the biggest throughout the company's more than 130-year history.” They hope that the deal will help solve the problems and production will soon be resumed, and said they are ready to continue dialogue with the strikers. The company also promised to keep jobs “for more than 90% of employees” and said that they “left their wage rate unchanged.”

“Only the system for counting non-working hours has changed, but even in its updated form it is better than the industry's established practice,” the company said in a statement. – In the current situation, we offer employees the best way out: at a time when the company is going through a difficult period, it can offer employees who stay at home during downtime only 50% of their salaries. Each of our employees is important to us, but at the same time, the language of ultimatums, aggression and blackmail against those employees who, together with us, are trying to save the company, are extremely unacceptable.

When production is fully resumed, the company has yet to say can not. In the meantime, mineral water is gradually disappearing from the shelves of Georgian stores: it can only be found in hypermarkets, which have the ability to store large stocks. This situation has already affected prices: in a number of retail chains, Borjomi has risen in price by an average of 30%. Another serious challenge in the company is the restoration of access to export markets: now they are complicated by the war in Ukraine.