The rainbow nation has been a star performer in recent years, regularly posting double-digit growth due to the weakness of the rand and a resonance with consumers at various price points.
But the run has ended, leaving Australia, Chile, New Zealand and Argentina as the only countries in growth in the top 10 countries of origin chart.
Miguel Torres Maczassek, general manager of the Torres wine empire, welcomed the news that Chile had returned to growth in the UK, but said the best is yet to come from the South American nation.
He told OLN: “Chile has not fulfilled its potential yet. We are learning more about the best places to grow vines and the wine quality is always improving.
“I think over the coming years the quality will improve greatly and more premium wine will come to the UK.”
Overall wine is down 3% in volume and 1% in value to £5.4 billion, but most other drinks categories are in rude health, leading total alcohol in the off-trade to grow 1% in volume and 2% in value to £15.6 billion.
Beer is up 3% in volume and 2% in value, while cider has arrested decline to hold volumes and grow value sales by 1%.
Sparkling wine continues to soar, with sales up 26% in volume and 26% in value, meaning the £582 million category is worth almost double sales of Champagne.
Spirits are up 1% in volume and 3% in value, with all categories showing growth except brandy.
Vodka is up 5% in value, gin is up 6%, liqueurs climbed 5%, rum is up 5% and tequila is up 7%.
RTDs also grew 5%, while fortified wine suffered a 4% value drop.