* OIV sees 2017 wine output at 246.7 mln hectolitres, down 8 pct on year
* Weather causes steep drop in Italy, France, Spain
* U.S. output seen little changed, China data not yet known
By Gus Trompiz
PARIS, Oct 24 (Reuters) - Global wine production this year is set to fall to its lowest level since 1961 after harsh weather in western Europe damaged vineyards in the world’s largest production area, international wine body OIV said on Tuesday.
Global output is expected to fall to 246.7 million hectolitres in 2017, down 8 percent from last year, the Paris-based International Organisation of Vine and Wine (OIV) said in its first estimates for the year.
A hectolitre represents 100 litres, or the equivalent of just over 133 standard 75 cl wine bottles.
The global decline reflects a plunge in output in the European Union, where the world’s top three producers — Italy, France and Spain — are each projected to see a sharp drop.
The European Commission, the EU’s executive, estimates the bloc’s wine grape harvest will shrink to a 36-year low in 2017 as adverse weather from spring frosts and summer heatwaves takes its toll.
In France, the weather has affected most of the main growing regions including Bordeaux and Champagne, and the government has projected production will sink to its lowest in decades.
The OIV’s projections, which exclude juice and must (new wine), put Italian wine production down 23 percent at 39.3 million hectolitres, French output down 19 percent at 36.7 million and Spanish production down 15 percent at 33.5 million.
Reduced global production may erode a surplus over demand seen in recent years, when consumption was curbed by the effects of a world financial crisis in 2008.
The OIV said it was initially assuming a consumption range of 240.5 to 245.8 million hectolitres based on medium and longer-term trends, but did not yet have firm demand data for 2017.
However, the impact of reduced production on actual market supply and prices depends on levels of stocks from previous years and the quality of wine in landmark regions.
In France, the world’s leading exporter by value, producers have pointed to the prospect of good quality wine.
Outside Europe, the United States, the world’s fourth-largest producer and the biggest consumer, was expected to see output remain little changed at 23.3 million hectolitres, down 1 percent, the OIV said.
Production in Australia was expected to rise 6 percent to 13.9 million hectolitres while Argentina was projected to post a 25 percent jump to 11.8 million after a weather-hit 2016, the OIV said.
The preliminary world estimates lacked data from some countries, notably China, for which the OIV provisionally assumed stable production compared with last year at 11.4 million hectolitres. (Editing by Luke Baker and Jason Neely)