Australia's wine industry could see a fall out from an oversupply of grapes, which could damage the international reputation of the country's business, according to industry leaders.

Speaking at a seminar yesterday, Australian winemakers warned that the oversupply could see a number of smaller businesses go bust.

Domaine Chandon manager Tony Jordan said a number of winemakers would be "closing their doors if they're small and unbranded".

With Australia's success so heavily based on the quality of its brands, Jordan also raised fears that the increase in red wine supply would lead to greater exports of unbranded wine, which could tarnish the image of the Australian industry.