The head of one of one Australia's largest wineries - Stephen Millar, president and CEO of Constellation Wines - has urged the federal government to provide tax relief to help the smallest.

Millar joined the industry campaign to have the government reduce the wine equalisation tax (WET) in its May budget. The industry wants the first 600,000 litres a year to be WET-free to help the nation's 1580 small operators.

Australian wineries paid A$1.1 billion (US&817 million) in tax last year making it the highest taxed major producer in the world, he said.

Tax accounted for about a quarter of every bottle sold at retail level. Current profit level for small wineries were unsustainable, Millar said in his formal submission to the government. The US Constellation Brands took over BRL Hardy last year when Millar assumed his new role.