The Sherry Institute of Spain - which is affiliated to the Spanish Embassy in London - and Spanish sherry-producers' trade organisation Fedejerez are to co-ordinate the pitch.
Phipps PR, which has handled the account for seven years, is in the running for the three-year contract, which will be reviewed annually.
Clarion Communications, Jackie Cooper PR, Westbury Commmunications and CommsPlus are also in the frame for the work, according to Fedejerez MD Bosco de Torremocha.
Carpe Diem Communications and R&R Teamwork were approached to handle the work, but declined, according to de Torremocha, who added that he was open to proposals from other agencies.
The pitch is being co-ordinated by de Torremocha, who is based in the Spanish sherry-producing region Jerez, but who will travel to London for the pitch process.
'We think it is a sane procedure to review our PR support every three years,' said de Torremocha.
'We think past campaigns have been positive, but we feel we need to concentrate more on the heritage of Jerez,' he added.
In 2000 Phipps' PR remit grew to cover disciplines such as retail promotions, media planning, sampling and sponsorship media relations.
De Torremocha said the new contract would involve 'more or less the same' type of work as had been handled by Phipps PR.
Phipps won the account in 1995, when sherry regained the legal right to its name - meaning that since then sherry can only come from Spain.
Centred around the city of Jerez, the 'sherry triangle' includes three main centres at Jerez de la Frontera, El Puerto de Santa Maria and Sanlucar de Barrameda.