Crisis Distillation for German Wine in 2026/2027: What Changes and How It Affects the European Market

Key data

German wineries have a surplus problem in the 2026/2027 marketing campaign and the European Commission has just given them a legal tool to manage it. The Commission Delegated Regulation (EU) 2026/1913, published on 3 August 2026, authorizes crisis distillation in the German wine sector: a way to convert surplus wine into alcohol, reduce stocks and stabilize prices.

This measure is not new in the European framework — it is provided for in the Common Organization of Markets (CMO) agricultural regulations — but its activation for Germany in this specific period indicates that disruptions in the German wine market have reached a sufficiently serious level to justify exceptional intervention.

What does this regulation establish?

Commission Delegated Regulation (EU) 2026/1913 activates, temporarily and exclusively for Germany, the crisis distillation measure provided for in the framework of the EU agricultural CMO. These are the key elements it establishes:

• Legal authorization to distill surpluses: German producers and wineries can convert surplus wine into alcohol, reducing pressure on their stocks and market prices.
• Exceptional and temporary nature: The measure applies only during the 2026/2027 marketing campaign. It is not a structural or permanent measure.
• Exclusive geographic scope: It applies only to Germany. No other Member State is included in this regulation.
• No direct financial aid: The regulation does not provide for subsidies or direct payments to producers. It is a regulatory authorization, not an economic support program.
• Regulatory framework: It falls within the crisis management instruments of the agricultural CMO, designed for situations of serious market disruption.

Crisis distillation is a well-known mechanism in the European wine sector. Its logic is straightforward: when there is too much wine on the market and prices fall, converting part of that surplus into industrial or food-use alcohol reduces the available supply and stabilizes the market. The resulting alcohol can be used for industrial, pharmaceutical or food purposes.

Economic and operational impact

For German wineries, this measure opens a regulated outlet to a surplus situation that, without intervention, would pressure prices downward and generate increasing storage costs. The concrete effects are:

• Reduction in storage costs: Wineries with accumulated surpluses can distill them instead of keeping them in storage, freeing up capacity and reducing operating costs.
• Price stabilization: By removing volume from the market, the measure helps curb the fall in German wine prices.
• No additional regulatory cost: The regulation does not impose new obligations or fees. It only enables an option that was not previously legally available for this campaign.
• Indirect impact on the European market: The reduction of German surpluses can influence the balance of wine prices across the EU, including the Spanish market. If German wine stops putting downward pressure on prices, other European producers could benefit from slight stabilization.

For Spanish companies importing or distributing German wine, it is advisable to monitor whether the application of this measure reduces the availability of certain references or modifies price conditions in the coming months.

Who does it affect?

• German wine producers with surpluses in the 2026/2027 marketing campaign: they are the direct beneficiaries of the legal authorization.
• German wine wineries and cooperatives that need to manage oversized stocks.
• European importers and distributors of German wine: may see the availability or price of the references they market affected.
• Wine producers from other EU countries (including Spain): the rebalancing of the German market can have indirect effects on European wine prices.
• Industrial and food alcohol industry: the alcohol resulting from distillation can enter supply chains in sectors such as pharmaceuticals, cosmetics or food.

Practical example

A German winery that accumulates surplus wine from the 2026 harvest — above its expected sales capacity for the 2026/2027 marketing campaign — can take advantage of this measure to distill that surplus volume instead of keeping it in storage.

Without this authorization, the winery would have two options: sell at heavily reduced prices to liquidate stock (pushing the market downward) or assume the costs of prolonged storage. With Regulation (EU) 2026/1913 in force, it has a third legally supported option: convert the surplus into alcohol, recover part of the product's value and free up winery capacity for the next campaign.

For a Spanish importer working with German wines, the practical consequence may be a reduction in downward pressure on purchase prices in the second half of 2026 and early 2027.

What should companies do now?

1. German wineries with surpluses: Evaluate whether the volumes accumulated in the 2026/2027 marketing campaign justify taking advantage of crisis distillation. Consult with the German wine management body (Deutsches Weininstitut) on the specific procedures for joining the measure.
2. Importers and distributors of German wine: Monitor the impact of the measure on the availability and prices of the references you market. Review supply contracts that may be affected by changes in available volumes.
3. Spanish and European wine producers: Follow the evolution of the German market during the 2026/2027 marketing campaign. The reduction of surpluses in Germany can have positive indirect effects on European wine prices.
4. Advisors and consultants in the agri-food sector: Inform clients in the wine sector about the existence of this instrument and its framework within the agricultural CMO, especially if they have operations or business relationships with the German market.
5. All affected companies: Consult the full text of Commission Delegated Regulation (EU) 2026/1913 in the Official Journal of the EU to learn the exact technical and procedural requirements of the measure.

Official source

Consult full regulation in official source

Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific decisions, consult a qualified professional. Source: https://eur-lex.europa.eu/./legal-content/AUTO/?uri=OJ:L_202601913