Tenerife Council Divests from Bodegas Insulares Amid Broader Public Sector Review

The Tenerife Island Council (Cabildo de Tenerife) recently finalized its exit from the winery Bodegas Insulares SA. While this move might look like a shift toward a smaller government, it is actually a strategic reorganization of the Council’s extensive business interests rather than a move toward privatization. By reducing its capital, the Council has officially ended its 45.66% stake in the company, a step that was planned back in 2025.

This decision highlights the sheer scale of the Council’s public sector. Far from shrinking, the Cabildo remains the primary driver of Tenerife’s economy. It manages a complex network of nearly 40 entities—including foundations, consortia, and commercial companies—that are essential for delivering public services and carrying out local policies.

The scale of this operation is clear in the 2026 budget. Mobility services, such as the bus and tram networks (Titsa and Metropolitano), are set to receive over 256 million euros. Water management and agricultural support, handled by agencies like the Island Water Council and Balten, will receive more than 200 million euros. Additionally, the social services branch, led by the IASS, has been allocated 417 million euros to support the community.

However, managing such a large network brings significant oversight challenges. A recent debate over 96,000 euros in expenses at the Auditorio de Tenerife revealed how the "in-house" status of these entities can sometimes bypass standard financial checks. Vice President José Miguel Ruano acknowledged these issues, noting that the Auditorio’s legal structure allowed for a lack of prior oversight, which highlights the need for stricter control over how these organizations spend public money.

To address these risks, the Cabildo has empowered its Public Sector Office to audit these companies and decide whether they should continue operating or be dissolved. In the case of Bodegas Insulares, the Council determined that the winery is now stable enough to operate without public support.

Even so, the Cabildo remains deeply involved in a wide range of fields, from volcanology and biomedicine to tourism and culture. The core challenge for the Council is no longer just about the number of companies it owns, but ensuring that each one provides real value and efficiency to the island’s development. As it stands, the Cabildo remains the most powerful economic force in Tenerife.