Industry figures said Australia looked certain to have crushed at least 915,000 tonnes this year in the vintage which runs from late January to May, up from last year's 792,000 tonnes and the previous record of 885,000 tonnes in 1996.

"The quality has been better than last year; in both whites and reds it has been quite outstanding," said Bruce Kemp, chief executive of Australia's largest wine producer Southcorp Ltd, maker of the prestigious Penfolds Grange range.

Kemp said although Australia's wine grape growing regions had experienced a dry winter, spring rains had been well-timed and a dry summer kept down the risk of disease and pests.

Critically, he said, 1998 saw further growth in premium wine grape tonnages, particularly for red wine varieties where worldwide demand is seento be growing 20 per cent a year.

Kemp said the 1998 harvest was "substantially up in tonnes, better in quality and, for us, a much better mix of premium red tonnage which we have been short of".

"When you look at the vintage numbers, plus the current very competitive rate of the Australian dollar, you cannot be too unhappy," he told Reuters.

But, Kemp said that the 1998 vintage did not mean lovers of some of Australia's finest and slower maturing red wines -- like the Penfolds Bin range -- would find it easier to top up supplies. The disastrous 1995 drought vintage is still starving supplies at the top end of the market.

The Winemakers Federation of Australia (WFA) estimates Australia will have crushed 350,000 tonnes of premium white grapes in 1998, up on 1997's 296,000 tonnes, and about 242,000 tonnes of premium reds, up on 217,000 tonnes.

Until 1990 premium grapes represented less than half of Australia's total crush, but will this year total 64 per cent.

The Australian industry is faced withrelatively flat domestic demand but it has dramatically boosted production this decade, from 540,000 tonnes crushed in 1990, after success in Britain sparked a continuing export boom.

Australia's wine exports were worth only A$20.5 million ($13 million) in 1985-86, but reached a record A$763 million in the 12 months to April 1998. Britain, with exports worth A$324 million, remains by far the strongest market but sales are also picking up quickly in the United States.

Official figures show Australia's planted vineyard area grew about 28,000 hectares to 88,500 hectares in the six years to 1996-97, with an increasing focus on premium varieties to match the shift worldwide towards better quality wine consumption.

Total production is expected to reach one million tonnes by 2000 and wine producers are now shifting their investment focus from vineyards to processing and storage.