That's a fall of nearly 12pc in volume and a fall of 11pc in value over the corresponding period to May 2007.

Volume declined for the first time in 14 years since 1994-95.

By contrast, the average price increased for the first time in seven years, up 1pc, to $3.78 per litre.

A significant reduction in bulk shipments and a smaller decline in bottled shipments were the key outcomes influencing the 2007-08 results.

And unfavourable exchange rates for the $A exacerbated the decline.

Whites declined by 15pc, at a greater rate than did reds, which were down 11pc.

Export of wines in the most expensive category - more than $10/litre - dropped more than did exports of the cheaper wines.

Shipments have declined to UK and US but these markets still rank one and two.

But there's been strong value growth in Hong Kong, Denmark, and some growth in exports to China, the Netherlands, Singapore and Ireland.

The seasonally adjusted estimate for domestic sales of Australian produced wine was 34.5 million litres in May 2008, an increase of 2.8pc on April 2008 but a fall of 7.3pc on May last year.