Peak body for the Australian wine industry, the Winemakers Federation of Australia has said that Hunter Valley wine producers are suffering a financial hit due to an oversupply of Australian wine.
Paul Evans, chief executive of the peak body said the increased supply has resulted in fierce competition, ABC Rural reports.
"Well for Hunter wine growers, they've got to compete with wines from all across Australia," said Evans.
"If there is an over-supply of course that competition increases.
"That competition is extremely fierce at the moment and that reduces margins and profitability for everybody."
Evans says that although it has been a tough time for the industry, the weakening Australian dollar coupled with Asia’s increasing thirst for quality wine may provide a more positive outlook.
"The recent correction in the Australian dollar will help, and there's a lot of optimism around emerging markets such as China,” said Evans.
"But overall it's been a very challenging three or four, five years for the industry."
According to the National Australia Bank, exports of Australian wine into the Chinese market is set to rise by 50 percent within the next three years, representing a prime opportunity for Hunter Valley producers.