French winemakers are beginning to claw back their dominance of the global wine market after years of problems in responding to innovation from the New World.

A series of reforms in the way wine is produced in France, which include labelling wines by grape variety as well as by region, appear to have boosted the beleagured industry.

The latest figures show wine and spirit exports grew by 13 per cent last year, to reach a record 8.74 billion euros (11.51 billion dollars), with a notable increase in foreign sales of still wines.

France's share of the still wines market in the United States -- set to become the world's biggest consumer next year -- has gone up two points to 14 per cent, at the expense of Australia.

"The export figures show that we are going in the right direction. We must advance towards the path of committed reform," Louis Regis Affre, managing director of the Federation of Exporters of Wine and Spirits in France (FEVS), told AFP.

Two "good quality" vintage years in 2005 and 2006 and a 20 to 25 per cent drop in prices that is "indicative of the crisis" have improved the competitiveness of French wine, he said.

Affre warned the crisis in French winemaking was not "behind us," saying the industry must "continue changes to quality and legibility to find again long-lasting competitiveness in all sectors."

According to a study by the American agency Delaitte and Cie/Deussen, foreigners believe French wine labelling is "incredibly complicated" and contains names that are "impossible to pronounce."

Advertising campaigns remain "all over the place" and appear "inconsistent," according to the industry.

"We are considered, as much in the United States as in the United Kingdom or Japan, as an old country with a product that is too expensive, snobbish, elitist," Affre said.

It was as much to defeat these "false ideas" as anything that French winemakers wanted to give the world "a more modern image of our wines," he said.

Under the French government's plans to shake-up the wine industry, new "wine producing areas" were set up bringing together mid-range wines and wines designated under the formal Appellations d'Origine Controlee (AOC) system, to improve the way regional products were marketed.

A new class of wine, "Vineyards of France," was also created by bringing together mid-range wines of the same grape variety (such as merlot or cabernet) from all over the country.

Previously, labels only indicated where the wine came from, putting French wines at a disadvantage to New World wines identified by grape.

This proposal gives winemakers enough of a supply base to put in place proper marketing strategies and create products better designed for consumers' needs.

At the same time, reforms to the AOC system, which imposes restrictions on grape varieties and wine-making methods for designated wines, should result in stricter controls.

FEVS president Phillipe Casteja said he was "extremely optimistic for the next 25 years, when wine will be one of our flagship products."

The issue of foreign exports is crucial at a time when wine consumption in France is falling.

The industry is turning towards the US -- the Americans are set in 2008 to overtake the French as the world's biggest drinkers -- as well as China, which has daily per capita wine consumption of just 0.3 litres a day, or even Russia.