Behind Australia's seemingly unstoppable wine export boom - sales of more than 500 million litres a year worth US$1.6 billion - is an industry-facing crisis for thousands of producers.

According to latest industry statistics there are 1625 wineries - a number which has doubled in a decade - and more than 7000 grape growers. But 22 of them account for 92% of the market and just four, Southcorp, Hardy, Orlando Wyndham and Fosters (through its Beringer Blass wine division) take some 80%. Moreover, simultaneously while multinational liquor groups, such as the US Constellation Brands, Allied Domeq and brewers Lion Nathan, have moved aggressively into the production side of the industry, Australia's supermarket giants, Woolworths and Coles Myer have taken an increasingly strong grip at the checkout end of the trade. Woolworths and Coles Myer are now reckoned to have 40% of the domestic liquor market.

Australia's 2003 vintage was 1.65 million tonnes of grapes, 1.174 megalitres of wine. This equates to exports of 40% and static domestic consumption of 35% with the balance held for maturation or simply as yet unsold. With the major producers able to offer economies of scale and the retailers able to insist of them, more than 1600 small wineries are now fighting for just 8% of the market and, above all, shelf space.

The result is a proliferation of internet and other mail order operations, newsletters and cellar door sales outlets. While the wine quality is there, it is increasingly subordinate to the fight for exposure. Ms Di Davidson, who runs a viticultural advisory service, and who is also a successful wine grape grower, says that for the foreseeable future, the absolute key to success will be marketing. Australia's small wineries give the industry its identity. But with 10,000 or more labels clamouring for attention it is a battle for the smart and the rugged.