The French government is allocating €200m (£171.6m) to destroy surplus wine and support producers.
It comes amid a cocktail of problems for the industry, including a falling demand for wine as more people drink craft beer.
Overproduction and the cost of living crisis are also hitting the industry.
Most of the €200m will be used to buy excess stock, with the alcohol sold for use in items such as hand sanitiser, cleaning products and perfume.
In a bid to cut back on the overproduction, money will also be available for winegrowers to change to other products, such as olives.
In funnelling the money into the industry, the French government aims to stop “prices collapsing… so that wine-makers can find sources of revenue again”, Agriculture Minister Marc Fesneau said.
Despite the financial help – an initial EU fund of €160m which the French government topped up to €200m – the wine industry needs to “look to the future, think about consumer changes … and adapt”, he added.
European Commission data for the year to June shows that wine consumption has fallen 7% in Italy, 10% in Spain, 15% in France, 22% in Germany and 34% in Portugal, while wine production across the bloc – the world’s biggest wine-making area – rose 4%.