UPDATE 1-Bayer expects charges in 2016 as wine growers link fungicide to crop damage

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ZURICH, Oct 14 (Reuters) - Bayer <BAYGn.DE > expects to pay wine growers compensation starting early next year after vineyards in Austria, France, Germany, Italy, Luxembourg and Switzerland reported 2015 crop damage possibly linked to one of the company’s fungicides.

European grape growers reported deformed leaves and lower yields after using Moon Privilege - called Luna Privilege in some markets - from the German company’s Crop Science unit.

In Switzerland, losses are estimated at 80 million Swiss francs ($83.73 million), according to marketing group Swiss Wine.

Bayer has acknowledged “atypical symptoms” in vines where the fungicide was applied in 2014. Bayer said it was collecting data and assessing how much it will offer to wine growers.

“Bayer will on a voluntary basis compensate affected wine growers which have used the Moon Privilege/Luna Privilege fungicide last year,” a Bayer spokesman said, adding no “clear cause” had been determined.

Bayer has said it expected more than 250 million euros ($279 million) in annual peak sales from its Luna product line launched in 2012 for fruits and vegetables.

Austria Wine, the marketing arm of that country’s wine industry, didn’t immediately respond to requests for figures for possible damage that may be linked to Moon Privilege.

Jean-Marc Amez Droz, Swiss Wine’s general secretary, estimated harvest losses totaling 6.65 million kilos (14 million pounds) of grapes in 2015, or about 4.85 percent of 2014’s crop.

Hardest hit were Pinot Noir grapes, often grown in the German-speaking part of Switzerland, and Chasselas, a white wine grape prevalent in French-speaking Vaud canton. A few growers lost their entire 2015 harvest, Amez Droz said.

“Wine makers are missing about six million bottles of wine,” he said. “The very young berries just didn’t grow. The development of the berries was totally out of the ordinary.”

Growers who deployed the fungicide late in 2014 in rainy conditions saw more damage than those who applied it earlier in dry weather, Amoz Droz said, a trend confirmed by Bayer.

Switzerland’s Federal Office of Agriculture suspended its approval of Moon Privilege in wine growing in July.

On Wednesday, a spokesman said private growers would need to resolve their own damage claims but the agriculture ministry would continue to work with Bayer to determine the cause. The ministry was also aiming to boost approvals stringency.

“Approval will take at least a year longer, as now we’ll have to investigate damage that might occur a year following application,” spokesman Juerg Jordi said. Bayer must start from the beginning if it is to sell Moon Privilege again in Switzerland for grape growers, he added. (Reporting by John Miller in Zurich and Ludwig Burger in Frankfurt; Editing by Mark Heinrich)