On any view, the Australian wine industry is undergoing a period of enormous change. But it's a game for big players. A stagnant Australian beer market has seen cashed up Australian brewer, Fosters, increase its Mildara Blass wine holdings with the purchase of major Californian winemaker, Beringer, for $2 billion plus. Then we read speculative reports suggesting that the giant UK spirits company, Allied Domecq, sees Australia's largest wine company, Southcorp, as a "vulnerable" target for acquisition.

Exports of Australian wine maintain an upwards curve as overseas demand for our "fruit-driven" styles continues unabated. And the success continues, with Southcorp's Penfolds brand winning the Red Winemaker of the Year award at the London International Wine Challenge.

Australia, although only a minor player on the world wine scene, with two to three per cent of world production, has had a disproportionate influence on world tastes in wine. The international recognition of Australian wine quality, combined with an Aussie dollar plummeting in the direction of the Indonesian rupiah, means that our wines are becoming even cheaper for overseas buyers.

Australia's small wine makers meanwhile, continue to battle in a highly competitive, over-supplied marketplace. And, as has happened frequently in the past, it is inevitable that many of them, due to a lack of capital investment or to inadequate cash flow, will fold and be bought up by the corporates.

Does this scenario deter anyone from investing in vineyard planting and winemaking? Not at all. The last two vintages have seen record or near record harvests, and the planting of new vineyards continues frantically. Yet, according to July figures from the Australian Bureau of Statistics, the trend estimates for domestic sales of Australian wine are down 2.5 per cent on July 1999. Record plantings and production, versus sluggish sales? It just doesn't add up.

So, what will happen when the wine from these new plantings floods the trading floor? Certainly there is no way that an increasingly aggressive export market will absorb it all. My belief is that over the next few years we will see a glut of wine grapes with a consequent stabilisation, if not a fall, in wine prices. This can't be good for winemakers but will undoubtedly please consumers.

As for investing in a small vineyard to fund my retirement, I'd rather take up yachting. The latter pursuit has been likened to standing on one leg, under a cold shower, while tearing up $100 bills. It sounds like a far better investment than planting vines.

Tastings 

Redbank Long Paddock Chardonnay 1999 

Victoria. Pale, faint gold. Sweet melon bouquet. Commercial style, light, almost delicate in the mouth, showing straightforward fruit and a nice balance. Rating: bronze. Cellar: to 2003. Price: about $AUD7.

Dominion Wines Alexander Park Riesling 2000 

Strathbogie Ranges, Victoria. Bright, green-hued. Attractive and upfront lime marmalade bouquet. Generous and very fruity in the mouth, mid-dry with clean and tangy acidity. Very approachable young wine with good staying power. Rating: gold. Cellar: to 2007. Price: about $AUD16. Web: www.dominionwines.com.

Straws Lane Pinot Noir 1998 

Hesket, Victoria. Medium cherry red. Subdued varietal strawberries and cherries on the nose. Dry on the palate with more pleasing strawberry character, a touch of secondary wine development and substantial weight at the finish. Best enjoyed as a food accompaniment. Rating: silver. Cellar: to 2005. Price: about $AUD31.

Yalumba Barossa Merlot 1999 

Barossa Valley, South Australia. Mid to light crimson. Spicy inviting nose filled out with just enough oak. Softer style in the mouth with plenty of ripe berries, mocha-like flavours and a finish that is quite firm. Rating: silver. Cellar: to 2005. Price: around $AUD16. Web: www.yalumba.com.