Australia's giant supermarket chains, now dominant in liquor retailing, are looking to extend their own-brand wines.

While Coles Myer already has a limited range of such wines under its Liquorland and Vintage Cellars labels, Woolworths is now also looking at extending its home brand business.

Reports of the major Australian supermarkets following the European retail pattern are worrying medium and small producers already battling low prices, grape oversupply and shelf space exposure, despite a current small upturn in domestic consumption.

The reports have raised fears in particular in well-known regions such as the Barossa, due to the potential impact on their own brand identity.