The wine industry has flagged a need for significant restructuring to ensure it remains profitable.
The Winemakers Federation has announced a review to consider ways to adapt to changing market conditions.
Federation president Tony D'Aloisio said balancing supply with demand will be a key challenge.
"We need to analyse that information, we need to come to a view of how we get supply and demand back into balance," he said.
"But then, more importantly, how does that translate into increased profitability for not only for the large, but for the medium and small winemakers? "What we really want to focus on in this review is to move away from anecdotal evidence, to really fact-based evidence to try and guide the industry on what it should be focusing on in the next three to five years." Quality first Winemaker Wolf Blass said there needed to be a stronger emphasis on quality to ensure international markets kept buying Australian wine.
"Globally the wine industry is in diabolic trouble with surplus, so it's time that we are re-looking at strategies - how we can go forward and maintain and retain the position as the fourth-biggest export country in the world?" Grape growers said weather conditions would produce a smaller harvest across the nation for the third year running.
Extreme wet weather on the east coast and dry conditions elsewhere are likely to reduce wine grape yields by more than 10 per cent.
But executive director of Wine Grape Growers Australia, Lawrie Stanhope, warns the wine industry will still be struggling with an oversupply of grapes.
"We do need to remember that the reasons we've had lower yields the last three seasons are because of seasonal factors and at the end of the day the industry still holds the sort of production capacity that will maintain an oversupply situation," he said.