Storm in a New World Wine Glass

The EU is risking another trade war over the way some Australian wines are flavoured with an oaky undertone.

Traditionally such flavouring is done by ageing the wine in oak barrels. But some Australian winemakers use a short cut: oak chips are simply tossed into a vat of wine and allowed to soak. The result, according to many new world winemakers, is every bit as good.

The method is illegal in the EU and is regarded with disdain in France, Italy, Spain and Portugal. But exceptions have been made in the past for American and Chilean wines.

The EU is negotiating a wine and spirits agreement with Australia, and the European commission suggested making such a concession to the Australians in the interim as a goodwill gesture. But goodwill, officials say, is nowhere to be found.

"It's a battle of philosophy," said one EU source. "For some EU producers, making wine in this way is a complete no-no and just can't be tolerated. This is a battle between old world and new."