EU, Australia toast new wine deal

The deal will give geographical indicators like that of the famous French bubbly, along with Portugal's "Porto" and Spanish "Sherry," full protection in Australia as soon as one year after the deal comes into force.

The EU hopes the wine deal will allow it a foot in the door to secure similar geographical protection for other farm products, like Parma ham and Roquefort cheese.

"I hope the acknowledgment of the Australian authorities might have a certain spillover on other areas, not only on wine," said EU Farm Commissioner Mariann Fischer Boel.

She signed the agreement with Australia's Foreign Affairs Minister Stephen Smith, who lauded the extra export potential it held for Australian producers.

European producers have been increasingly pushed off supermarket shelves by Australian wines, which are often cheaper, carry better labeling and often carry bold flavors with mass-market appeal. At stake is the world biggest wine consumer market.

"It is a terrific market to break into. We don't put any limits on how far we can go," said Smith.

The country exports some Australian $1.4 billion (euro710 million; $895 million) into the EU, primarily to Britain but increasingly into continental markets traditionally dominated by French wines. Australian wine imports increased by almost 75 percent between 2000 and 2006, at the cost of European mass market producers.

"We think we can do even better," said Smith.

At the same time, European producers were increasingly angered that their most exalted exports like Champagne have to compete with local knockoffs that brazenly use their names. Anticipating the deal, many Australian wine producers have already started changing names like "Champagne" to "sparkling wine."