Australia's battle of the brands

Out on the open Aussie road, the order comes through on the mobile. "Give us a price for 400 oak barrels, willya," says Joe.

Out on the open Aussie road, the order comes through on the mobile. "Give us a price for 400 oak barrels, willya," says Joe. My driver is the rep for Seguin Moreau, the oak barrel merchant, and his face lights up like a halogen bulb. This is no ordinary Joe on the line, but Joe Casella, buying oak barrels at £270 a pop for the family firm that makes Yellow Tail, the Aussie phenomenon of the hour. "Where would we be without Casella?" asks my driver, rhetorically. Where indeed. What with the widespread disenchantment with oaky flavours and the two small harvests before last year's bumper crop, orders for expensive oak barrels have been as dry as a dingo in the Great Sandy Desert.

Its appeal to the sweet of tooth and the startling kangaroo on its label have made a huge success of Casella. So much so that the family company based in Australia's irrigated Riverland has been catapulted into the big league of the country's wine brands, along with the Jacob's Creeks and Nottage Hills of this world. Another newcomer to the big league, McGuigan Simeon, has stealthily mutated into an Australian giant by mopping up some of the lakes of grape surpluses from the record 2004 harvest and churning out everyday wines with an instant sweetness to lure consumers into the comfort zone.

These wines may bring comfort to the consumer, but they aren't giving their makers an easy ride. Fosters, the lager giant, is currently bidding for Southcorp, one of the grandees of Australian wine. Even if the landmark Penfolds' Grange doesn't end up in a can, Southcorp's other famous wine brands, Lindemans and Rosemount, could be under threat. At the same time, the market for the growing number of small wineries is becoming uncomfortably crowded. James Halliday's new Australian Wine Companion 2005 lists 377 new wineries, bringing the Australian winery count total to close on 2,000. Many of the newcomers are quality operations aiming to express the uniqueness of their locations, but will they get the chance to do so?

Ubiquitous price promotions have eroded Australia's wine prices and are gnawing at its quality image. These are turbulent times for Aussie wine. Less so for the labels that are standard-bearers for their regions - such as Cullen in Margaret River, Tyrrells in the Hunter Valley, d'Arenberg in McLaren Vale or Peter Lehmann in the Barossa Valley. But just as Australia is beginning to break the mould with adventurous dry whites and lighter reds in the Spanish and Italian style, life is getting tougher for many of the exciting newcomers striving to introduce new wine styles and showcase up-and- coming regions like Orange, Heathcote, Macedon, Wrattonbully, Kangaroo Island, Frankland and Tasmania.

The new breed have to struggle to make their voices heard. You'll find a smattering on our high streets, but it's the specialist independents in the UK who are doing the most to fill the growing void: wine merchants such as Philglas & Swiggot, Vin du Van, Oz Wines and Noel Young (have a look at the Which? Wine Guide for a full list).

At an exhibition of beautifully executed Australian scenes by the photographer Rankin at Proud Central, Buckingham Street, London WC2 (which ends today), the Bondi and cute kangaroo images are as obvious as a can of Fosters. It's much the same with Aussie wine. To drink the real Oz, you need to look past the kangaroos, crocks and koalas.