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Champagne acts as a simple dominant gene. It dilutes the body and points of the horse. Champagne horses are born with bright blue eyes, brown hooves and pink skin. As they grow, pigmentation begins to appear in their eyes and skin. The eyes gradually darken and usually become an amber color, but can stay also stay amber/green or blueish green. The pink skin develops dark freckles or mottles with age and will also darken to some extent.

Foals are usually born darker than their final adult color. Champagne horses often have an iridescent shine to the coat and may also display reverse dappling, but these traits can occur on non-champagne horses as well.