Universal Music Australia is expanding its domestic A&R activities under its managing director George Ash.

His strategy is to relaunch two iconic labels -- Island and Mercury -- into the Australian market as full-service, Sydney-based A&R operations, signing and developing domestic artists.

A&R veteran Peter Karpin is appointed GM, A&R, and head of Mercury Records Australia. He will also undertake A&R activities with Universal Music Publishing. Michael Taylor is named GM, A&R, and head of Island Records Australia.

Karpin has been head of A&R at Sony Music Australia and Mushroom Records since the early 1980s. His two biggest acts were Men At Work and Tina Arena, who respectively sold 20 million and seven million albums globally, according to Sony Music. More recently, he was managing director of BMG Music Publishing Australia, where he signed Powderfinger, Bernard Fanning and Rogue Traders.

New York-based Michael Taylor has held senior A&R positions at Epic and Maverick in the United States. He was Sydney-based director of A&R at Sony Music Entertainment Australia between 2001 and 2004, during which time he worked with hit Aussie acts Delta Goodrem, Killing Heidi and Something For Kate, and produced R&B singer Paulini's chart topping debut single "Angel Eyes".

Universal is the second largest record company Down Under, with a market share estimated by retail and label sources at about 24%. Its domestic roster includes hit acts as Wolfmother, Bernard Fanning, Powderfinger, Sarah Blasko, The Avalanches, Grinspoon, Spiderbait and Vanessa Amorosi. Many of these came to Universal through its partner labels, Steve Pavlovich's Modular and Powderfinger manager Paul Pittico's Dew Process.

Wolfmother's manager John Watson, president of Sydney based John Watson Management told Billboard.biz, "Universal has made some very strong moves in local A&R lately. That means more investment in new, homegrown talent and it can only be good for the whole Australian music industry. Having two in-house label identities is smart because it should allow them each to have smaller, more focused teams surrounding each release. Traditionally that structure leads to more breakthroughs than a more sprawling setup where it's harder to tightly coordinate everyone's efforts."

In a statement, Ash said: "This marks the start of a very exciting phase in our company's A&R development. The opportunity to launch both Island and Mercury to complement our label partners Modular and Dew Process is unprecedented in the Australian market. Establishing these labels with Michael and Peter gives us not only great music people, but also proven entrepreneurs who will drive success for Australian artists globally."

Added Max Hole, president, Asia-Pacific, Universal Music Group International, "There seems to be a new wave of exciting, distinctive artists emerging in Australia and connecting with music fans. We already have the basis of a very strong artist roster there that we can expand upon, and we're convinced that we can also develop more world-beaters like Wolfmother and Vanessa Amorosi."