Wine sales plunged at the height of the coronavirus crisis, leaving winemakers with millions of litres of unsold wine.
Exports, particularly to the US, fell sharply but domestic sales also fell.
“From tomorrow, 33 licensed distillers will be able to collect the wine and distil it,” said Didier Josso, head of the wine branch in the farming agency FranceAgriMer, at a video press conference.
The alcohol resulting from the distillation is exclusively reserved for the pharmaceutical and cosmetic industry and the production of hand sanitiser, and for the production of ethanol.
“The distilled wine in no case is to be used to make spirits,” said Josso.
“There will probably be a need to stock ethanol as well, but the volumes will be less significant than for wine,” he added.
Each winemaker has up until June 19th to indicate the amount he or she wishes to distil.
In return they will receive €78 in compensation if the wine is certified as belonging to a region and €58 if not.
European public funds will finance the distillation of two million hectolitres of French wine after Brussels gave its green light for the exceptional measure.
Experts said three million hectolitres were in need of distilling.
Major wine-producing countries such as Spain and Italy have resorted to similar measures to regulate the excess, as well as to the exceptional destruction of young grape vines.
The coronavirus pandemic has added to the woes of the French wine industry, which had already suffered a setback last year with a drop in exports to the US as punitive tariffs kicked in.