Crisis distillation in the French wine sector 2025/2026: what changes and how it affects the European market

Key data

French wine producers have an emergency tool at their disposal for the 2025/2026 marketing year: crisis distillation. Commission Delegated Regulation (EU) 2026/744, in force since 31 March 2026, establishes this exceptional and temporary measure in response to the serious imbalances affecting the wine market in France.

The measure is not new within the European regulatory framework: it falls within the crisis management mechanisms provided for in the EU Common Market Organisation (CMO) for agricultural products. What is significant is that its activation for France in this cycle confirms the severity of the surplus situation in the sector and has consequences that extend beyond French borders.

What does this regulation establish?

Commission Delegated Regulation (EU) 2026/744 authorises and regulates an exceptional and temporary crisis distillation measure for the wine sector in France, limited to the 2025/2026 marketing year. The key elements are as follows:

• Activated mechanism: Crisis distillation, which consists of transforming wine surpluses into industrial or technical-use alcohol.
• Objective: To reduce pressure on wine prices and restore market balance in the face of serious supply and demand imbalances.
• Legal framework: Falls within the crisis management mechanisms of the EU Agricultural CMO.
• Scope of application: France exclusively. No other Member State is included in this measure.
• Nature: Exceptional and temporary, with no intention of permanence beyond the 2025/2026 marketing year.
• Financial support: Eligible French wine producers will receive European financial support to distil their surpluses.

Crisis distillation is a last-resort instrument within the common agricultural policy. Its activation implies that the ordinary market regulation mechanisms have not been sufficient to correct the existing imbalance in the French wine sector.

Economic and operational impact

Although the measure applies exclusively in France, its effects extend across the entire European wine market. The main impacts are:

For sector operators outside France, the activation of this measure may result in a degree of stabilisation of wholesale wine prices in the European market, as the volume of French surpluses available for sale is reduced. However, the European financial support to French producers may also be interpreted as a temporary competitive advantage for the French wine sector over that of other EU countries.

Who is affected?

The regulation has clearly differentiated direct and indirect stakeholders:

• Wine producers in France: Directly affected. They may apply for the crisis distillation measure with European financial support if they meet the eligibility criteria established in the regulation.
• Wineries in the French wine sector: Directly affected. They may benefit from the measure to manage their surpluses from the 2025/2026 marketing year.
• Wine producers from other Member States (Spain, Italy, Portugal, Germany, etc.): Indirectly affected, through changes in prices and competitive conditions in the European wine market.
• Importers and distributors of French wine: May see altered supply and pricing conditions for French wines during the 2025/2026 marketing year.
• Industrial alcohol industry: Potentially benefiting from the increased supply of alcohol resulting from the distillation of wine surpluses.

Practical example

A French winery with wine surpluses from the 2025/2026 marketing year that it cannot place on the market at profitable prices may apply for the crisis distillation measure established by Commission Delegated Regulation (EU) 2026/744. Instead of selling that wine at very low prices and undermining the market, the winery directs it to distillation and receives European financial support that offsets part of the cost of that operation.

The result is twofold: the winery receives economic compensation for its surpluses without depressing market prices, and the volume of wine in circulation is reduced, easing downward pressure on the sector as a whole. For a Spanish or Italian producer competing in the same market segments, this may translate into a slight stabilisation of European wholesale prices during the marketing year, although it also means that the French producer receives public support that is not available to its competitors in other countries.

What should companies do now?

1. Producers and wineries in France: Verify whether they meet the eligibility criteria established in Commission Delegated Regulation (EU) 2026/744 to apply for the crisis distillation measure with European financial support before the end of the 2025/2026 marketing year.
2. Producers from other Member States: Monitor the impact of the measure on prices and competitive conditions in the European wine market during the 2025/2026 marketing year in order to adjust commercial strategies if necessary.
3. Importers and distributors of French wine: Review contracts and supply conditions with French suppliers, as the measure may alter the availability and price of certain wines during the marketing year.
4. Advisors and consultants in the agri-food sector: Inform their clients in the wine sector about the existence of this exceptional measure and its implications, both for French operators and for European competitors.
5. All operators: Consult the full text of the regulation on EUR-Lex to understand the exact technical and procedural requirements of the measure.

Official source

Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific decisions, please consult a qualified professional. Source: https://eur-lex.europa.eu/./legal-content/AUTO/?uri=CELEX:32026R0744