Europe’s winemakers have often been unable to get rid of their wine recently. But what to do with it when the next harvest is waiting? The EU is rushing to the aid of the industry – and the wine is becoming cheap industrial alcohol.
From Riesling to Rioja to Chardonnay and Pinot Grigio: wine from Europe is popular worldwide. Despite this, the EU has spent millions in recent years turning it into cheap industrial alcohol. Since the beginning of 2023, more than 105 million euros in EU funds have been paid for the so-called crisis distillation of European wine, as the EU Commission announced at the request of the German Press Agency. Surplus wine is distilled in the member states at EU expense in order to then use the alcohol for industrial purposes.
Last year around 34 million euros were spent on the distillation of wine. This year there were almost 71 million in January alone. The highest costs fell on France with a total of 68.5 million for 2023 and January 2024 combined, followed by Portugal with more than 18 million and Italy with around 15 million euros. In Germany, no wine was processed into industrial alcohol using EU money during this period.
Distillation as a crisis measure
Last June, the EU Commission decided on a special measure that made it possible for member states to use crisis distillation to remove surplus wine from the market. This was intended to stabilize the wine market and create storage capacity for new wine. Reason for the tense situation: According to the EU Commission, inflation had made food and drinks so expensive that people were buying less wine. In addition, there was a lot of supply due to good harvests and companies have not yet fully recovered from the corona pandemic.
During the pandemic, the EU had already invested hundreds of millions of euros in transforming European wine. In 2020 it was 250 million euros, of which 127 million went to the distillation of French wine alone. In 2021, around 43 million euros were spent on crisis distillation – this time mainly on Romanian wine (23 million euros). German wine was not distilled with the help of EU money during the two years of the pandemic. When asked, there were no significant sales difficulties here, explains the German Winegrowers Association.
An uneconomical process
“Wine doesn’t get better through storage,” explains Simone Loose, professor of wine economics at Geisenheim University. Wine consumption is declining worldwide, but the vineyards are often designed to last 30 to 40 years. When the warehouses are full and the old wine has to make room for new, the wine can be distilled and used for industrial purposes. “The product still has a use – even if industrial alcohol could be produced much more cheaply using cellulose,” says Loose. “So this is a very uneconomical process.”
Crisis distillation only makes sense if the shocks are one-off and consumption recovers afterwards, says Loose. But it doesn’t look like that at the moment. According to the expert, it would therefore be better to put the money into repurposing vineyard areas. “In the simplest case, you say: We have too much red wine and the trend is towards white wine, so we switch to white wine.”
People generally drink less wine
Since people are generally buying less wine, it makes more sense to reduce the vineyard areas in Europe, says Loose. These could then be used, for example, for other agricultural products, biodiversity areas or alternative energy production.
Source: Stern
