Austria is Facing a Particularly Drastic Measure

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As the wine cellars are fuller than the market can absorb, the Austrian Winegrowers’ Association wants to have up to 10 million litres of red wine distilled. The wine would no longer end up in glasses but would be processed into industrial alcohol.

 

What at first glance sounds like a massive waste is, above all, the latest warning sign from a European wine sector struggling with falling consumption, growing stocks and consumers who are increasingly less likely to choose red wine as a matter of course.

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Full Cellars, but Fewer and Fewer Drinkers

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The proposal relates to red wine from 2025 and older vintages still stored in tanks or barrels. By removing this wine from the market, the sector hopes to make way for new harvests whilst at the same time providing some financial breathing space for affected winegrowers. A final decision has not yet been made. The Austrian Winegrowers’ Association has not yet officially submitted its plan to the Ministry of Agriculture. The Ministry wishes to examine the economic justification first before any European funding is sought. 

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The fact that the situation is becoming so dire at this very moment is also linked to the relatively large Austrian harvest of 2025. A total of 2.56 million hectolitres of wine was produced, 37 per cent more than during the exceptionally poor year of 2024 and 11 per cent above the average for the previous five years. Production of red and rosé wine rose to around 701,000 hectolitres. Whilst this volume was 21 per cent higher than a year earlier, it remained roughly in line with the five-year average. The problem, therefore, is not so much an extraordinary volume of new red wine but the combination with stocks that are not selling sufficiently.

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Meanwhile, Austrian wine consumption fell to 25.5 litres per capita in 2024/2025. Overseas sales are also providing less of a lifeline. Oostenrijk Wein had previously reported that exports of bottled red wine had declined by 12.5 per cent in volume and 14.4 per cent in value in 2024.

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Red Wine is no Longer Taken for Granted

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Austria is by no means alone. According to the International Organisation of Vine and Wine (OIV), global wine consumption fell to an estimated 208 million hectolitres in 2025. That was 2.7 per cent less than in 2024 and as much as 14 per cent less than in 2018. Nine out of the ten largest wine markets recorded a further decline. The Netherlands, with a fall of 12.7 per cent, was among the most notable decliners. 

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The causes go far beyond a temporary dip. Inflation and reduced purchasing power are making consumers more price-conscious, whilst younger generations are drinking alcohol less frequently or spreading their interest across wine, cocktails, craft beer and non-alcoholic alternatives. As a result, full-bodied, expensive and high-alcohol red wines are coming under particular pressure. At the same time, production costs are rising and viticulture is becoming more vulnerable to drought, heat, frost and other extreme weather conditions.

 

The extent to which preferences are shifting became apparent in France several years ago. In 2023, more white wine than red was produced there for the first time. White accounted for 40 per cent of French production, compared with 39 per cent for red. Red wine production fell by 11 per cent that year, whilst white wine production rose by 10 per cent. 

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The symbolism is significant. Even in a country that is culturally almost synonymous with red wine, producers are increasingly responding to the demand for fresher and lighter styles.

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From Wine to Disinfectant

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In a crisis distillation, unsold wine is distilled into alcohol. To prevent this alcohol from competing with ordinary drinks again, it may only be used for industrial purposes, such as in disinfectants or for energy production. The wine thus disappears permanently from the consumer market.

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Germany recently received European approval for a similar scheme. In Rheinhessen and Württemberg, a maximum of approximately 24 million litres of red and rosé wine from 2025 and earlier vintages may be distilled. Producers receive 43 cents per litre, supplemented by 16 cents to cover transport and distillation costs. The measure is being funded with over 14 million euros from the European agricultural reserve.

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For Austria, the disposal of 10 million litres of red wine could bring some short-term relief. It frees up space in the cellars, prevents further price falls and gives businesses stuck with unsellable stock some financial breathing space. But it does not attract new wine drinkers. 

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Crisis distillation tackles the stock, not the root cause of the problem. The wine industry will therefore have to make structural adjustments. It must produce less for a market that no longer exists, focus more on light-bodied red wines, lower alcohol percentages, white, rosé and sparkling wines, and communicate more clearly about origin, sustainability and quality.

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Red wine will certainly not disappear, but its long-standing leading role seems to have come to an end. The future may well belong to a smaller wine sector that sells fewer litres but has a better understanding of what a new generation really wants to drink.