French Wine Industry Turns to Ethanol Amidst Falling Demand

Facing a downturn in both domestic consumption and exports, the French wine industry is receiving €40 million in EU funding to distill surplus wine into ethanol and industrial alcohol. This emergency measure aims to stabilize prices and support winemakers grappling with unsold stock, particularly red and rosé wines.

Declining Demand and Price Drops

Shifting drinking habits, with consumers increasingly opting for beverages other than wine, are contributing to the industry’s struggles. According to data provided to the European Commission by French authorities, the average price of bulk wine orders has fallen by 19% compared to previous years. Retail sales of red and rosé wines in France dropped by 8% last year [1].

EU Funding and Distillation Process

The European Commission has approved a €40 million “emergency” fund to facilitate the distillation of approximately 1.2 million hectolitres of surplus wine [2]. Winemakers and cooperatives will receive €33 per hectolitre for the distilled product. The resulting ethanol and industrial alcohol will be used for various applications, including disinfection, pharmaceuticals, and energy purposes [1].

Regional Impact

Wine regions across France, including Bordeaux and Burgundy, will be affected by this initiative. Burgundy, in particular, is facing oversupply issues and will see a significant portion of its excess wine distilled into ethanol [3]. This isn’t the first time the EU has intervened; previously, 2.65 million hectolitres of wine were distilled into industrial products between 2023 and 2024 [4].

Previous Interventions

This current measure builds on previous EU support for French winemakers. Between 2023 and 2024, the EU funded the distillation of 2.65 million hectolitres of wine, equivalent to the volume of over 100 Olympic swimming pools, into ethanol and other industrial products [4].