The group blamed the decline on extreme weather in Italy, France and Spain - the world's top three producers.
Total world output is projected to fall 8% from last year to about 247 million hectolitres.
This could raise prices and dissipate a global surplus caused by a demand slump in the wake of the financial crisis.
According to OIV estimates, Italian wine production will fall 23% to 39.3 million hectolitres.
Levels will drop 19% to 36.7 million hectolitres in France which is predicted by the European Commission to be facing its worst harvest since 1945.