Chilean wine producer Concha y Toro has reported a slump in first-quarter profits as the sharp rise in the Chilean peso hammered earnings.

Concha y Toro, the producer of brands including Casillero del Diablo, yesterday posted a 71% drop in net income to CLP1.4bn (US$2.7m) for the first quarter of the year. Revenues fell 6% to CLP38.9bn. The company said the value of the peso rose 12.4% against the US dollar during the three-month period.

"Export returns in US dollars increased 5.3% in the period, with the volume shipped increasing 7%. Largest growth gains were obtained in South America and Asia. However, this result was offset by a lower exchange rate," said Eduardo Guilisasti, Concha y Toro CEO.

Exports to the UK dipped 5.7%, the company said, again held back by the strength of the peso.

Concha y Toro also suffered a fall in domestic sales as the company's major clients cut their orders after a year of lower volumes in Chile in 2005. The company saw its domestic revenues fall almost 14% on the back of a 17% slump in volumes.