Wine prices in Australia are hitting new lows as the effects of the wine glut in the country continue to hit the industry hard, according to local press reports.

The Australian Broadcasting Corporation said today (24 July) that bottles of clean skin chardonnay and merlot were being sold for A$2.00 a bottle in major multiples. These wines usually command a price tag of A$6.00.

The report quoted chief executive of the Wine Makers Federation of Australia Stephen Strachan, who said: "I don't think anyone in the industry would've expected that we get to that point."

"What it does is it undermines the strength of existing brands and it means that the temptations for those brands to try and meet similar price points is there because they obviously want to be able to sell their wine."

However, he added that he was "quite certain" this was a short term phenomena, and would only be around as long as the current wine surplus existed.