Grape growers from the Barossa Valley have issued a stark warning to the Australian wine industry, saying it believes it is on the brink of short-term catastrophe, and recommending the formation of a national wine committee.

The growers' council says the oversupply of wine grapes and extensive volumes of wine in stock has led to a crisis that has meant grapes withering on the vine. Barossa Winegrape Growers' Council secretary, Bob Taplin, said that, in some cases, companies paid suppliers not to pick their grapes for the 2005 vintage.

"It's a problem across the nation, not just in the Barossa. The way things are looking, the industry is under a cloud for the best part of three or four years," Taplin said. "Whilst there are obvious reasons for optimism in the longer term, in the short term there are some serious problems that threaten to undermine our industry's success."

Taplin also referred to the drop in grape and export prices for wine, the fall in premium wine exports and rising uncertainty about the future of smaller wineries as other threats facing the industry.

The Barossa Council has recommended the creation of a national committee, which would include grape growers, winemakers and representatives from federal and state governments.

"Part of the problem within our industry is also that we are very disunited," Taplin said. "The industry is asset rich, but cash poor and liquidity is a problem right across the board with growers and winemakers. The industry needs to be better managed."