Various media reports say a worldwide wine surplus is pushing prices down and Australian grape growers could consider alternative markets, such as the emerging fuel industry.

The Brisbane Courier Mail reported that Australian winemakers are considering following the lead of French and Italian winemakers who are already selling their substandard wines for ethanol production.

Last year in France, the worldwide wine glut forced winemakers to direct 100 million litres of wine to oil refineries for mixing into fuel.

The ethanol is produced by boiling the alcohol off wine, condensing it and capturing the vapour.

ABC News also recently reported that Victorian grape growers had asked the Federal government to support a proposal to turn part of its half a billion litres of surplus lower quality wine into ethanol.

Victoria's Sunraysia Area Consultative Committee claims that 10 litres of wine could produce one litre of ethanol.