The wine authority Viniflhor has predicted production of the drink will be down 5% this year on 2007.
Producers are expected to make 43.6 million hectolitres, down on last year's 46.5 million which was already considered a below average year.
Poor weather and a cold spell at a critical time in vine growth were blamed, along with a reduction in the number of vineyards.
As well as EU compensation to limit wine overproduction, vineyard owners are also accepting tempting offers from property developers.
Viniflhor said that at the lowest quality end, table wine production would be down 8.5%, while the appellation d'origine contrôlée AOC wines will be down 6.8%.
"The cold snap in late March had a direct impact on some vineyards," a spokesman for Viniflhor said.
"From the Bordelais region to Provence, there was frost on April 6 and 7, at a critical period when the grapes are very vulnerable," they added.