says grape production figures for 2008 show the country is still capable of meeting the quality demands of the global market.
A survey of the 2008 intake has shown it to be both bigger and of better quality than forecast.
The WFA says the harvest of 1.83†million tonnes of grapes was "almost double some early predictions".
Chief executive Steven Strachan said: "The figure represents a resounding success in a challenging year and is testament to the resilience and adaptive nature of our regional growers and wineries.
"A harvest such as this should dispel any fears that we are unable to supply our domestic and international markets with the volume of quality Australian wine required."
But Strachan said the vintage "raises some concerns" about Australia's long-term ability to compete at lower prices.
"With increasing pressures caused by water shortages, a strong Australian dollar and a tough international market, we can no longer compete on price alone," he said.
"Australian wineries produced some real high-quality vintages this year - with some regions experiencing their best season in years - and this is where our focus must lie.
"No one wants to return to an over-supply situation, but this large harvest underlines the fact that structural change†is required in some parts of the wine industry if they are to have a sustainable future."
Red grapes accounted for 53% of the total intake in 2008 - a rise of 45% over 2007.
White grape production rose by a more modest 18%.
Sauvignon Blanc and Pinot Noir saw the biggest increases, up by 74% and 63% respectively.