Bloomberg

(Bloomberg) -- France’s wine production may decline to its lowest level in three years after spring frost and hailstorms wiped out grapes from Champagne to Burgundy and the Loire River valley, the government said.

Wine output is set to drop 7.9 percent to 44.1 million hectoliters, the equivalent of 5.9 billion bottles. Champagne production may slump 27 percent to 1.65 million hectoliters, an Agriculture Ministry outlook published online on Friday shows. The region’s total production including generic wines may drop 32 percent to the lowest since 2003, based on data from crop office FranceAgriMer.

“This drop from a year ago of estimated production is mainly the result of the spring frost that hit some viticulture areas,” the ministry said. “Damage related to the hail in Charentes and Burgundy-Beaujolais also reduces the production potential.”

Wine is France’s biggest agricultural export, with 8.27 billion euros ($9.1 billion) in shipments last year, customs data shows. Overseas sales were boosted by a 12 percent jump in the value of Champagne exports, as producers including Vranken-Pommery Monopole and LVMH reporting strong demand in the U.S. and Japan.

In Champagne, spring frost destroyed grape production on 4,600 hectares (11,367 acres), and there’s strong pressure from fungal diseases mildew and gray rot, the ministry said. Almost a quarter of the region’s vineyards suffered frost episodes, with flower buds entirely destroyed on 14 percent of the area, according to the Champagne wine board, which expects grape picking to start mid-September.

In the Burgundy-Beaujolais area, home to the world’s most expensive wines, production may fall 23 percent to 1.77 million hectoliters. In Charentes, the source of grapes for Cognac, the volume is predicted to sink 15 percent to 8.12 million hectoliters.

Bordeaux production may be little changed at 5.64 million hectares, according to the ministry data. In the Loire River valley, the volume of the vintage may slump 32 percent to 1.88 million hectoliters.

The outlook is preliminary and could still change due to the strong pressure from mildew, as well as wet soils that could be beneficial for the volume of the grape harvest, the ministry said. In 2013, when botrytis rot added to damage from poor flowering and summer hailstorms, the ministry cut its outlook four times through November.

To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net. To contact the editors responsible for this story: Jerrold Colten at jcolten@bloomberg.net, Mark Deen

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