Aussie wine is cheaper than water

Sydney - Australian wine is being sold off cheaper than water, as a glut of grapes pushes the cost of a bottle to below two dollars.

Bumper harvests for three straight years have led to a massive oversupply, with up to a billion litres of unsold wine in storage tanks across the country.

Leading winemakers have seen their shares tumble and many grape growers could be forced out of business.

But for the consumer, it means quality wines are available at a fraction of the normal price as producers move their excess stock in unlabelled bottles known as cleanskins.

"There are more wine bargains around that I have ever seen," said Shane Tremble, merchandise manager for liquor retailer BWS, who has been in the industry for 30 years.

"There is no doubt that the glut is forcing down prices," he said.

Last month, BWS, which stands for beer, wine and spirits, offered a six-bottle pack of 2006 unwooded Chardonnay for A$11,93 dollars (£4.80) - and quickly sold out.

Tremble said the cleanskin hailed from Mildura, a famous wine growing region in Victoria which boasts big names like Lindemans and Deakin Estate.The Dan Murphy's superstore chain owned by Woolworths is offering a 2005 Cabernet Merlot for just A$1,95 dollars a bottle - this time a cleanskin from south-east Australia. Bottled water sells for around A$3 (£1.20) a litre.

Adam Jenkins, senior business manager in wine with Dan Murphy's, said it was the cheapest retail price he had seen.

"I have never seen wine sold sub two dollars before," he said, adding that even branded wines were selling at A$5 a bottle due to competitive market conditions.

The prices are reminiscent of the "Two Buck Chucks" in the United States, when a glut of Californian grapes in 2003 allowed a company called Charles Shaw Wines to sell bottles for $1,99.