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Grapes ripen near Bacharach in Rhineland-Palatinate: “Wine doesn’t get better through storage”

Photo: Tim Würz / dpa

Due to a lack of demand, some wine has to be used for the industry: the EU has spent millions in recent years to turn 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 dpa news agency.

Surplus wine is distilled in the member states at EU expense so that the alcohol can then be used for industrial purposes.

SPIEGEL had already reported last year about the enormous sums that it costs to dispose of fine wines.

Last year, around 34 million euros were spent on the distillation of wine, although production had already fallen to a historic low.

This year there were almost 71 million in January alone.

The highest costs went to France with a total of 68.5 million euros, 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.

Inflation is affecting the wine market – crisis distillation should help

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 pandemic years.

When asked, there were no significant sales difficulties here, explains the German Winegrowers Association.

“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.

“So 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."

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.