Germany’s economic hangover hits historic winery

The Landesweingut Kloster Pforta, one of Germany’s oldest wineries, faces insolvency by 2027, according to an expert report commissioned by the state government. Its troubles, from an unsustainable business model to high staffing costs, come amid a wider German wine slump driven by falling consumption and cheaper imports.

Owned by Saxony-Anhalt, Kloster Pforta is one of Europe’s oldest continuously operating wineries. Cistercian monks founded the monastery in 1137 and planted the Pfortenser Koeppelberg vineyard in 1154. The state took ownership after German reunification in 1993, but the estate still grows rare historic varieties, including Weisser Heunisch and White Elbling, alongside Riesling, Pinot Blanc, and Pinot Gris.

An independent report by auditing firm Ecovis, cited by the Mitteldeutsche Zeitung on Tuesday, found that the winery can no longer secure credit or maintain liquidity on its own.

“The current business model is not sustainable in its present state, as it is generating persistent losses,” the auditors warned, adding that “without drastic restructuring measures, these losses will lead to insolvency and over-indebtedness of the company by 2027 at the latest.”

Auditors blamed high payroll costs, inefficient vineyard use, and weak sales and marketing, compounded by a disastrous 2024 harvest and the wider wine-market slump. To avoid bankruptcy, Kloster Pforta now plans to halve its vineyards, cut staff, and receive a €2 million injection under a four-year restructuring plan.

German wine has been in decline for years. German Wine Institute (DWI) data earlier this year showed that annual consumption fell from a Covid-era peak of 24.3 liters per adult to 21.5 liters – below pre-pandemic levels.

Since the start of the Ukraine conflict, producers have faced higher energy, labor, and material costs, pushing up prices, while consumers have increasingly turned to cheaper bottles as German food prices have risen by around 30% on average.

Cheap imports add to the squeeze: Spanish bulk wine, for example, enters Germany at just €0.91 ($1.06) per liter, making it difficult for domestic producers to compete at the €1-to-€3-per-bottle end of the market.

Wine woes mirror Germany’s wider slump

The winery’s troubles come amid a broader German slump, with near-zero growth, high energy costs, and business insolvencies at a 20-year high. Since moving away from Russian energy in 2022, Germany has turned to costlier supplies, while major manufacturers have closed factories amid weaker demand.

Meanwhile, Berlin has committed €96 billion ($109 billion) to Kiev, launched a €100 billion rearmament drive, and pledged to raise core defense spending to 3.5% of GDP by 2029. Amid criticism that military spending is coming at the expense of domestic needs, Chancellor Friedrich Merz’s approval has plunged to a record-low 13%.