In 1991, when Russia pulled the rug from under Eastern Europe's wine exports, a radical rethink was required to prevent the industry collapsing. The solution lay in transforming the plonk consumed by the Russians into wines that were suited to the more sophisticated palates of the West.

Bulgaria, having wisely decided back in the Seventies that its bread was buttered on the Western side, had already taken the lead. It catered to Western tastes with premium red grapes aged using oak barrels or chips a la Rioja, and marketing them successfully.

As foreign capital, technology and expertise trickle east, the rest of the region has started to catch up. So much so that Bulgaria is in danger of being overtaken by the quality and variety of wines now coming from its northern neighbours. Hungary, thanks in part to a generous export subsidy, has moved quickest. Its white wines are the best in the region. The Czech Republic, Slovakia and Slovenia have started to look interesting, too. Even Romania and Moldova, the latter with a leg-up from the giant Penfolds group, are producing acceptable wines.

Much of the progress has been due to the flying winemakers from Australia and New Zealand. They have brought aromatic character and refreshing fruit flavours to familiar grape varieties and have also started to use some of the tongue-twisting natives.

In the high street, opinion is divided over Eastern Europe's wines. Tesco, Oddbins and the Co-op are still wary: without the necessary back-up technology and attention to detail, many a slip can lead to disappointing results. Sainsbury's, Safeway and Asda, on the other hand, have embraced Eastern Europe, taking the view that strict quality control and good relations with suppliers are the key to consistency. Waitrose has been converted, too, expanding its range to 20 wines.

Among Hungary's best new- wave white wines are those made under Australian Kym Milne's supervision at the giant, 3,200- hectare Balatonboglar Co-operative on Lake Balaton. The 1993 Chapel Hill Rheinriesling, pounds 2.99, Victoria Wine, is a fragrant, citrusy, off-dry white, while the classy, buttery rich 1993 Chapel Hill Barrique-Fermented Chardonnay, pounds 4.45, Sainsbury's, is one of the most stylish chardonnays to emerge from the region. South-east of Lake Balaton at Szekszard ('sex-art'), Australian Nick Butler and Hungarian Akos Kamocsay have produced a fragrant, lemony 1993 River Duna Sauvignon Blanc, pounds 2.99, Safeway, and the intriguing 1993 River Duna Pinot Gris, pounds 3.49, Safeway, a rich, smoky, dry white whose price belies its weight and complexity.

North of Budapest, Kym Milne supervises the Nagyrede Co-operative's production for the West, which includes the spicy, complex 1993 Matra Mountains Oaked Chardonnay, pounds 3.29, Safeway, and a consistently reliable, characterful 1993 Nagyrede Cabernet Sauvignon Rose, pounds 2.99, Sainsbury's, Safeway (on special offer at pounds 2.69 until 15 October). Up the road at Gyongyos, Adrian Wing, another Australian, produces chardonnay and sauvignon. Last year, the 1992 Chardonnay was voted one of Wine Magazine's white wines of the year. This year, the aromatic, 1993 Gyongyos Estate Sauvignon Blanc, pounds 3.29-pounds 3.49, Morrisons, Safeway, Somerfield, Thresher, Bottoms Up, Wine Rack, looks the better bet.

Among the emerging countries of former Yugoslavia, Slovenia is the most go-ahead. The 1993 Labor Chardonnay, pounds 3.95, Waitrose, in its statuesque Italian bottle, is lightly oaked chardonnay with pineappley undertones and an intriguing Ovaltine-like sweetness. Moldova still has a way to go to fulfil its promise, but Hugh Ryman's 1993 Moldova Rkatsiteli, pounds 2.99, Thresher, Wine Rack, Bottoms Up, shows some interesting, tropical guava-like fruit, suggesting better things to come.

With the exception of Eger, Bull's Blood country, Hungary's best reds come from the nicely-named Villany, its warm, southern outpost close to the Croatian border. Mr Butler's vibrant, blackcurranty 1993 Villany Cabernet Sauvignon, pounds 3.25, Waitrose, is a case in point, as is the light, juicy 1993 Hungarian Country Red, pounds 2.79, Victoria Wine. Perhaps the best value of the Villany reds, is the 1993 Safeway Hungarian Merlot, pounds 2.99, a delightful red with a plump core of plummy fruit and fine balance.

Despite Bulgaria's stagnation, the new-world influence has provoked a positive move away from oaky to fruitier styles such as the successful Young Vatted Merlot pioneered by Safeway. In similar vein, the 1993 Debut Bulgarian Cabernet Sauvignon, pounds 2.99, VW, is agreeably fresh and juicy, as is the 1993 Bulgarian vintage Premiere Merlot, Iambol Region, pounds 2.99, Thresher, Bottoms Up, Wine Rack. With a bit more age to it, the 1990 Reserve Cabernet Sauvignon, Iambol Region, pounds 3.49, Waitrose, nicely combines a touch of vanilla oak flavour with the ripe blackcurrant fruitiness of Bulgaria's new-wave reds.