EU approves crisis distillation: surplus red and rosé wine from Rheinhessen and Württemberg to be turned into industrial alcohol

Background: Declining wine consumption worldwide

The measure addresses a structural trend: the International Organisation of Vine and Wine (OIV) recorded the lowest global wine consumption in 2025 since 1957. The declines were particularly sharp in the United States, China, and France, according to the OIV. The organisation attributes the development to factors including social changes, economic uncertainty, and tariffs. As a result, many producers' cellars are full, and the market is considered saturated.

In a draft regulation, the EU Commission proposes that producers receive 59 cents for every liter they have distilled into industrial alcohol. From this payment, 16 cents per liter will be deducted to cover transport and distillation themselves. According to the Commission, this is intended to cover the costs and create an incentive to participate, without leaving producers to bear the full expense.

Financing and compensation

"Um Wettbewerbsverzerrungen zu vermeiden, darf der durch diese Destillation gewonnene Alkohol ausschließlich für industrielle Zwecke, zum Beispiel Desinfektionsmittel oder Energie genutzt werden", Brussels added. Use for beverages or food is expressly prohibited. This restriction is intended to prevent the distilled alcohol from competing with conventional drinking-alcohol products and thereby putting further pressure on an already weakened market.

Around 14 million euros are to be made available from the EU agricultural reserve fund for the crisis distillation. The draft was discussed in an EU expert group last week; according to the meeting minutes, there were no objections, meaning the path was formally clear. As SWR reports, the expert group has thus given the green light. The final adoption of the draft is scheduled for the second half of August.

Criticism: Only short-term relief?

Specifically, the wines are to come from the Rheinhessen and Württemberg wine-growing regions. As SWR information shows, it is above all these two regions in which stocks of red and rosé wine are currently considered problematic. With the distillation, producers also see the hope of freeing up space in their cellars "um die Lager für die neue Ernte freizubekommen".

Critics, however, view the measure with skepticism. "Kritiker sagen aber, das helfe nur kurzfristig, auf lange Sicht müsste die Rebfläche kleiner werden, damit weniger Wein auf den Markt kommt", SWR quotes voices from the industry. They point out that a one-off distillation does not solve the fundamental sales problems but merely buys time. In the long term, the area under cultivation must be reduced in order to bring supply and demand back into balance.

Outlook for the second half of August

Policymakers nevertheless express confidence that the crisis distillation now approved will at least achieve an acute market relief. The Rhineland-Palatinate Ministry of Viticulture emphasized that the measure should be seen as a complement to other instruments of EU wine market policy. Industry associations in the affected regions have been asked to inform their members about the conditions of participation and deadlines as soon as the regulation enters into force.

An excess of red and rosé wine, weakening global demand, and historically low consumption: the crisis distillation is an attempt, with Brussels's help, to ease a market crisis that has been simmering for years. Whether the 24 million liters will be enough to take the pressure off the cellars will become clear in the coming months – and with it the question of which structural reforms the industry must tackle alongside this.

For producers, the crisis distillation remains a double-edged sword: it provides short-term liquidity and storage space, but at the same time means that part of the harvest will not be marketed as wine. Observers therefore view the step less as a subsidy and more as a pragmatic response to a market that has lost its equilibrium.