EU Raises Wine Sector Aid to 80% as Consumption Predicted to Drop 1% Annually

European lawmakers and member states have reached an agreement on a new aid plan for the wine sector, which is expected to take effect in the coming weeks. The European Commission first announced this plan at the end of March, responding to a crisis that has shaken the industry. European wine producers have faced several challenges in recent years, including climate change, declining alcohol consumption across Europe, and tariffs imposed by the United States.

The new measures will give member states more flexibility in managing surplus production. One key provision allows countries to use European funds to finance vineyard uprooting operations, aiming to prevent oversupply and maintain market stability. Spanish Member of the European Parliament Esther Herranz García, who reported on the agreement, said these tools are designed to help the sector manage the deep crisis it is experiencing. The plan includes options for regulating supply according to demand and supporting crisis measures with EU funding.

To address climate-related challenges, the European Union will raise the ceiling for financial support from 50% to 80% of investments needed to adapt vineyards to changing weather patterns. This increase is intended to help growers implement new techniques and technologies that can mitigate the effects of extreme weather events.

The agreement also addresses changing consumer habits. The European Commission is encouraging innovation in wine production, including the development of alcohol-free wines. A harmonized labeling system will be introduced: products with less than 0.05% alcohol by volume can be labeled as "alcohol-free" with a "0.0%" indication. Wines with an alcohol content of 0.5% or higher, but at least 30% lower than their original category before dealcoholization, must be labeled as "reduced alcohol content."

Brussels is also promoting flavored products based on rosé wine and plans to increase support for wine tourism across member states. With about 60% of global wine production, the European Union remains the world’s leading producer, consumer, and exporter of wine.

Recent EU reports predict a steady decline in wine consumption in Europe, estimating a drop of about 1% per year due to lifestyle changes. By 2035, average annual consumption is expected to fall to 19.8 liters per person, compared with 22.3 liters between 2020 and 2024.

The issue of U.S. tariffs on European wines and spirits remains unresolved. Brussels continues negotiations in hopes of securing an exemption for European producers but has not yet reached an agreement with Washington. The new aid plan aims to provide immediate relief while longer-term solutions are sought for trade barriers and structural changes in the industry.