Investor attitudes towards Australian wine giant Southcorp hardened yesterday, as analysts warned that the country's largest winemaker may disappoint this year.

Investment bank JP Morgan has lowered earnings expectations by 12% for this financial year and 14% for 2002-03. According to specialist daily The Australian Financial Review, this forecast was based on softening sales in the domestic market and in the US which Southcorp has identified as a prime growth area.

JP Morgan#;s re-assessment noted that America#;s Robert Mondavi Corporation had been heavily discounting in the US$6-7 a bottle segment which put price pressure on Lindemans, Southcorp#;s prime American brand.

JP Morgan#;s analysis was matched, though in milder terms, by Merrill Lynch which told clients that patience was required for a Southcorp turnaround and that current earnings expectation were unrealistically high.

Together with the reports of an approaching grape over-supply - as reported by just-drinks - these projections impacted directly on the listed company.

Southcorp, the producer of Lindemans, Penfolds and Rosemount brands, saw its shares fall from A$7.24 (US$3.62) on Wednesday to A$7.05 (US$3.53) when markets closed for the Australian Day long weekend on Friday.consulting, industry research and CPA services to the wine industry.