The European Commission approved Germany’s wine distillation subsidy for two regions

The European Commission has approved a German request for an extraordinary market intervention that will subsidize the distillation of red and rosé wines from Rheinhessen and Württemberg, opening the way for a crisis measure aimed at reducing excess supply in two of the country’s wine regions.

The approval was announced by Rhineland-Palatinate’s wine ministry, which said Germany’s federal agriculture ministry submitted the request in early May after Rhineland-Palatinate and Baden-Württemberg asked Berlin to seek support from the European Union’s agricultural reserve. According to the ministry, producers in Rheinhessen and Württemberg had expressed interest in a crisis distillation program.

The relevant EU regulation is expected to be published in the second half of August. After that, federal and state authorities in Germany will have to complete the legal and technical steps needed to put the program into effect. Christine Schneider, Rhineland-Palatinate’s wine minister, said officials are working to implement it quickly but currently expect the program to begin in the fourth quarter of 2026.

The measure will apply to red and rosé wines with protected designation of origin from Rheinhessen and Württemberg. Under the draft regulation cited by the ministry, eligible wines must be from the 2025 vintage or older. The subsidy is set at 43 cents per liter, with an additional 16 cents per liter for logistics and distillation costs, bringing the maximum support to 59 cents per liter.

That ceiling represents 65% of the average market price for those wines in 2026, according to the draft regulation. The ministry said all funding will come from EU resources, with €14.16 million available from the bloc’s crisis reserve for the distillation program.

Based on the draft rules, the measure could remove as much as 240,000 hectoliters of these wines from the market. The alcohol obtained through distillation may be used only for industrial purposes, not returned to the beverage market.

German authorities also stressed that producers will be eligible for support only after their applications are approved. Wines distilled before approval will not qualify for aid.

The intervention is notable because it targets a specific pressure point in Germany’s wine trade: inventories of red and rosé wines that have weighed on parts of the market. By offering a subsidized outlet for older stocks, the program could help ease oversupply and influence pricing and production planning for wineries in the affected regions, while channeling the resulting alcohol into industrial uses rather than beverage sales.

Germany last used a subsidized crisis distillation measure in 2023. At that time, the maximum distillation aid was 65 cents per liter.