A NSW winery has won Australia's most coveted annual wine prize, the "Jimmy Watson Trophy".

Pepper Tree Wines' Reserve Coonawarra Cabernet Sauvignon 2000 was named the best one-year-old red at the annual Royal Melbourne Wine Show Awards.

Pepper Tree's win is the first for Hunter Valley - but owes much to grapes from South Australia's Coonawarra region.

South Australian wineries dominated the wine show. BRL Hardy won six trophies, including best white with the 1998 Eileen Hardy Chardonnay, best sparkling white and red and best chardonnay.

The Clare Valley's Taylors Wines won the best red with St Andrews Cabernet Sauvignon 1999. Banksia Wines won the best shiraz with the Tatachilla Foundation Shiraz 1998.

South Australia dominates the "Jimmy Watson Trophy" award with 31 wins.

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