In the Barossa Valley, grapes are shrivelling under the blistering sun. In the Yarra Valley, the damage from the devastating bushfires that ripped through the region is still being assessed.

At least the Hunter Valley seems to have overcome high temperatures and recent heavy rains to produce a good harvest. And in London restaurateurs are spending long nights looking at empty tables, spelling an end to the party on the other side of the world.

Wine growers are expecting a rationalisation as the twin burdens of a lesser crop and slowing economy inflict wrath on their grapes.

In the 12 months to January the industry's peak body, Wine Australia, found that export volume dropped by 9 per cent.

As growers finalised picking their white grapes this month, they are also facing the prospect of a 15 per cent fall in crop yield this year because of heat stroke and bushfires.

The falls are expected to eat away the oversupply of grapes enjoyed from 2004 to 2006, when it was estimated that the industry was 20 per cent too large.

Lawrie Stanford, Wine Australia's general manager of information and analysis, said this season would have a profound effect on the industry with Australian wine exporters yet to convince foreigners they're among the best in the world.

"The era of cheap wine is definitely going to be over. We simply can't sell that wine any more - it's over because growers have the aim to be a smaller industry, and it's going to be over because after the global financial crisis passes, the programs in place in the industry to promote our higher priced wines will be what carries us through."

Wine Australia will release its annual survey on Friday of this year's wine yield, but early estimations are that output will be lower than the 2007-08 season.

Tony Jordan, from the Yarra Valley Winegrowers Association, said he expects a fall of as much as 15 per cent nationwide, though his region has experienced a more modest fall of about 5 per cent.

Barbara Storey, from the Barossa Grape & Wine Association, expects crop yields to be down 20-30 per cent on a normal year after this month's heatwave.

"The ripening has been accelerated by the heat," Ms Storey said.

The main task for growers will be winning back the confidence of foreign drinkers when trade picks up again, especially our two biggest export destinations, Britain and the US, which spent 18 per cent and 26 per cent less on Australian wine in 2008, respectively.

"We know that we haven't quite done the job of convincing overseas consumers," Mr Stanford said. "We also need to take into account that there's been a fundamental shift in world market which will still be there when economic recovery occurs." A vine a bunch of problems

> Yarra Valley: bushfires, low yield.

> Barossa Valley: heatwave, yield down 20-30 per cent.

> Margaret River: wet weather, caterpillar attacks, lower yield.

> Hunter Valley: crop yield average, quality high.