(Reuters) - Global wine production fell sharply last year due to bad weather in Europe and a recent policy to drain its "wine lakes", while Chile and United States saw a jump in harvests, according to a report on Thursday. The International Organisation of Vine and Wine (OIV) said world production was down around 6 percent in 2012 at 251 million hectolitres (Mhl), a level it described as very low. European Union output fell 10 percent to 141 Mhl, with France suffering a drop of nearly 17 percent after a good harvest in 2011.

"We had a difficult year 2012, mainly because of a sharp drop in production, but trade flows mostly held stable," OIV Director General Federico Castellucci told reporters, referring to total wine exports which were stable at 101 Mhl after a long-term upward trend.