Australians hope to bowl us over with their premium wines

Australia's wine industry is set for an aggressive marketing push to lift UK exports after the Australian government rejected a proposed A$60m (£24.5m) industry tax to help bail out struggling grape growers.

The industry is set to promote premium wine to London restaurants to help offset the already highly competitive pricing in the retail market.

An emergency summit was held in Melbourne last Friday after it emerged that up to 5 per cent, or 100,000 tons, of Australia's grapes were left unpicked during this year's harvest as supply outstripped demand.

Australia's agriculture minister, Peter McGauran, rejected the proposed tax at the summit but backed initiatives to boost exports to well-established markets such as the UK as well as newer territories such as China. The price of exported Australian wine has been suffering since the glut started three years ago, with British retailers in particular helping to push down prices.

David Cooke, a Sydney-based drinks analyst, said the average price of a bottle of Australian wine had fallen by about £1 over the past three or four years.

At the summit, the Wine Grape Growers Australia federation had called for a tax of around A$10 per ton of grapes on the wine makers to help growers leave 15,000 hectares of vines untouched for two years.

Mr McGauran said it was up to the industry to sort out its oversupply problems but backed initiatives to help increase exports.

A spokesman for the Winemakers' Federation of Australia said that while exports continued to expand strongly in the 12 months to May, the value of wine exports had only grown by just over 1 per cent to $2.8bn.

"Large retailers in the UK are able to put strong downward pressure on prices," the spokesman said.

"We will now be focusing on growing 'on-premise' trade, such as restaurant wine lists."

Foster's Wine Estates managing director Peter Jackson said there was strong potential for premium Australian wine in the UK.