Within a generation, Australian wine became the plonk of choice for British drinkers. Now, the attention of oenophiles is turning to Chile, which has emerged as the rising star of the £10bn British wine market, with a sharp jump in sales and its reputation.

UK sales of Chilean wine soared 25 per cent to a new record last year, the fastest increase of any winemaking country, according to the analysts AC Nielsen.

It overtook Spain, to become the sixth most successful wine exporter to the UK – behind South Africa, Italy, the United States, France and Australia.

And it is expected to leapfrog the shrinking share of South Africa into fifth place in 2008.

Wine writers have acclaimed Chile's "crisp and zingy" sauvignon blancs, "sensational" shiraz and "fragrant" pinot noirs, following substantial improvements in the country's viticulture. Sales have been doing well because of this re-evaluation and because Chilean winemakers have adopted the mass marketing techniques of their New World rivals.

Mostly known for its reds from the north, Chile makes cabernet sauvignon, shiraz and merlot. In the south, the climate is similar to Marlborough in New Zealand and suited to sauvignon blanc.

All but 15 per cent of Chile's 90 million bottles sold here cost less than £5, but the premium offering is growing, according to AC Nielsen, which tracks sales at the checkout.

"Given that the market has grown by 4 per cent, then basically Chile is whizzing along at a 25 per cent growth rate," said the company's wine analyst Stewart Blunt.

"It has not been shy of engaging with the market. The leading brands have been investing in promotional activity, with price reductions and other tactics. Also, the quality has been good and the reputation is growing."

Virgin Wines, Sir Richard Branson's online vintner, now sells more wine from Chile than any other country. Chile accounted for 21 per cent of sales last month, compared with 6 per cent in 2006.

Rowan Gormley, chief executive, said: "It's basically the best value-for-money country in the world by a long way. I have got no axe to grind for Chile, but what's going on there is really exciting and it's not just cheap wine which Chile is now producing.

"There are all these copper magnates who are pouring millions into boutique wineries, employing the finest wine producers, surveying the land by satellite and importing root stock from Europe. They're not interested in selling the wine, they just want to supply it to their mates, so a bottle that would be £100 in the Napa Valley is selling here for £6 or £7."