In Croatia many years ago, we ordered the cheapest bottle on the wine list. It was disgusting. The locals were amazed that we didn't know to water it down before drinking.
That's also typical in Spain. In fact, most family restaurants offer free wine, but it's of that level of quality, so you usually mix it with sparkling water.
Also, it's typical of young people to mix cheap wine with Coca-Cola, and have parties with that.
It's typical to drink watered down wine with routine/non-fancy/on-the-road meals. The locals call it 'gemišt' which is a germanism (gemischt = mixed). The wine used for this is bottom of the barrel, since it's a shame to waste good wine for this purpose.
Haha, I had the same experience: ordered the house wine at a restaurant—wine they actually made at that restaurant—and it was thoroughly mediocre :P I'm not much of a wine drinker and Croatian wines from local wineries were fine to my taste, but the ≈homemade wine was an unambiguous step down.
When my grandparents lived in Croatia in the pre-WW2 years they used to mix a little wine into their water because the water quality was bad. I guess the wine killed the germs, or at least masked the taste of the water.
Sorry, I just don't remember after all this time. Although IIRC the label's picture had a peasant sort of character who appeared to be holding a glass at arm's length (or at least that's how we interpreted it)