http://revach.net/tefila/article.php?id=4065

Section: Halacha   Category: Food
Turning Wine Into Water
In the times of the Gemara water was added to wine to make it drinkable.  Nowadays, wine is sold diluted and therefore adding water to wine is unnecessary.  If one dilutes his wine with water (e.g. he can not tolerate the strength of the wine but drinks it for health reasons), the bracha in certain instances may change to shehakol.

The Pri Megadim (204:16) quotes the Elya Rabbah who paskens that if the wine was diluted to the point that the beverage contains more than 50% new water, a shehakol should be made.  However, if the beverage contains anything less than 50% new water, the bracha remains a hagafen. 

R' Bodner, in his sefer on brachos, writes that it is brought down that R' Chaim Kanievsky was told by the Chazon Ish that one should not add more than a third of water to wine.  If the beverage contains more than 33% of new water, a shehakol should be made. 

R' Bodner also quotes the Minchas Shlomo who writes that if even a small percentage of water was added to grape juice, the bracha changes from hagafen to shehakol. 

If one wishes to drink diluted wine/grape juice and is unsure as to what bracha should be make, he should make a hagafen on undiluted wine/grape juice and have in mind the diluted wine/grape juice which is in front of him.