The $100,000 donation by Yellow Tail Wines to the Humane Society of the United States' (HSUS) animal rescue program has prompted a flurry of angry online postings in the US calling for people to boycott the wine.
The HSUS describes itself as the United States' largest and most effective animal protection organisation and it sponsors workshops that teach people how to lobby for animal protection laws.
In response to the donation, a page called Yellow Fail has been set up on the Facebook social networking site and has attracted more than 3,000 fans.
A rancher from South Dakota has posted an online video of himself pouring the wine onto the snow in front of his cattle and urging others to do the same.
The issue has also prompted an article in the New York Post newspaper and comments in various US blogs.
Yellow Tail, owned by the Casella Wines company based at Yenda in the New South Wales Riverina, says it is the first time it has given money to the HSUS.
In a statement to ABC News, the managing director of Casella Wines, John Casella, says the company will look to non-political groups in the future.
"Yellow Tail is committed to the plight of animals in need and as a result, we can confirm that through any future activity, we will be looking to other non-profit organisations without lobbying interests that best deliver on our intended outcome of saving animals," the statement said.
Mr Casella says he never anticipated any negative criticism of the donation and the intention of the partnership with the HSUS was to celebrate and save animals.
"Being farmers ourselves, we acknowledge those who care for their land and their environment, just as we do," he said.
"We are proud of our rural heritage and value a solid relationship with agricultural communities around the world."
The HSUS says the partnership is about celebrating animals and the money will support the organisation's rescue team, which saves animals from natural disasters or cruelty.
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