EU Wine Consumption to Drop 36% by 2035 as Industry Faces Shrinking Vineyards and Export Pressures

The European wine sector is facing a decade of significant change, according to the EU Agricultural Outlook 2025-2035 published this week by the European Commission. The report, prepared by the Directorate-General for Agriculture, outlines a challenging scenario for wine producers across the continent. It forecasts a steady decline in wine consumption, shrinking vineyard areas, and increasing pressure on exports due to both internal and external factors.

The report projects that wine consumption in the European Union will decrease by about 0.9% per year until 2035. By then, average per capita consumption is expected to fall to around 19.3 liters, a sharp drop from over 30 liters per capita recorded in 2010. This trend reflects deep changes in consumer habits, driven by generational shifts, growing health awareness, and public health policies in several member states that encourage moderation.

Production is also expected to contract, with annual output forecasted to decline by about 0.5% each year through 2035. The total volume could reach as low as 138 million hectoliters by the end of the period. This reduction is linked not only to falling demand but also to a gradual decrease in productive capacity as vineyard areas shrink.

The area under vine in Europe is projected to decrease by about 0.6% annually until 2035. This ongoing reduction confirms a restructuring phase for European vineyards, marked by uprooting of old vines and fewer investments in new plantings. The report notes that this adjustment is necessary to align production with declining domestic demand and avoid market imbalances.

Exports, traditionally a strong point for European wine, are also expected to come under pressure. The outlook anticipates a drop of about 0.6% per year in export volumes through 2035. Key challenges include uncertainty over tariffs in the United States and ongoing difficulties in the United Kingdom, both historically important markets for EU wine. While some growth is expected in exports to Latin America and Africa, these emerging markets are not seen as sufficient to offset losses in the U.S. and U.K.

The economic context outlined in the report adds further complexity. The EU’s real GDP is projected to grow at an average rate of 1.4% per year until 2035, with inflation stabilizing at around 2%. However, a stronger euro—assumed at an exchange rate of $1.13 per euro—could make European wines less competitive abroad, especially in premium segments targeting the U.S., where New World producers benefit from weaker currencies.

Operational costs are expected to remain high due to energy prices and persistent elevated costs for fertilizers and crop protection products. The report highlights that fertilizer prices will stay above pre-crisis levels because of import tariffs on Russian and Belarusian products and new carbon border adjustment mechanisms coming into force in 2026.

Labor shortages are another concern for vineyard management, pushing producers toward greater mechanization. Climate volatility is also affecting grape quality and yields, with more frequent episodes of drought and heat stress altering grape composition.

In terms of sustainability, the report emphasizes that reducing environmental impact is now essential for market access as international trade agreements increasingly include environmental clauses. The sector is expected to contribute to an overall reduction of greenhouse gas emissions from EU agriculture by about 6% by 2035, mainly through more efficient fertilizer use and adoption of new grape varieties developed with advanced breeding techniques.

Despite these challenges, the financial outlook for many wine producers remains relatively resilient compared to other agricultural sectors. Net value added per worker is projected to rise by about 8% in real terms by 2035, although this increase is largely due to a shrinking agricultural workforce rather than higher overall profitability.

The structure of labor within the sector is changing as well, with a shift from family labor toward more professionalized operations employing salaried workers—expected to make up nearly 37% of the workforce by 2035.

The report concludes that the future viability of European wine production will depend less on recovering mass consumption volumes and more on strategic resilience built around quality, genetic innovation, and sustainability. These factors are seen as non-negotiable assets for maintaining competitiveness in global markets amid shifting consumer preferences and stricter environmental standards.

For now, European winemakers must adapt quickly to these evolving conditions if they hope to maintain their position as world leaders in wine production and export over the next decade.