Australia have gone down 38-24 to England at the junior rugby world championship in Auckland on Friday.
Halfback Henry Taylor and winger Nathan Earle scored two tries each as defending champions England proved too strong for the Australians in the Pool A clash.
England scored five tries to take their second straight bonus-point victory.
Australia, who defeated Argentina in their opening game, face Italy in a must-win clash on Tuesday.
"There were plenty of positives to take out of today and we will look to re-group ahead of Italy next week," said Australian coach Adrian Thompson.
"That game is now absolutely critical for us if we want to progress into the latter stages of the tournament."
South Africa, the 2012 champion, beat New Zealand 33-24 in a pivotal clash in Pool C, scoring a late try through Warrick Gellant for their second bonus point win.
Five-eighth Hande Pollard scored a try among 18 points for South Africa while winger Tevita Li scored a hat-trick for New Zealand.
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