Mexican authorities have relented to international pressures, particularly from the US, and shelved plans to ban the sale of bulk Tequila that is then bottled outside the country.

The move had been planned to control the quality of the country's national spirit and help improve its image, after claims that Tequila sold in bullk and bottled elsewhere was bing mixed with other spirits.

However, the move came under intense pressure from the US. The US spirits industry said that of the Tequila consumed in the US, 83% is shipped in bulk from Mexico and then bottled in US plants.

The Distilled Spirits Council of the United States feared the ruling would hit jobs in the US, raise the price of Tequila to consumers and cause product shortage in the country. Council president Peter Cressy said the proposed regulation would violate rules of the World Trade Organization and commitments made by Mexico when it joined the United States and Canada in the North American Free Trade Agreement in 1994.

In a statement last week, Mexico's Economy Ministry said the bottling measure planned for 2005 wouldn't be "the most convenient" for the Tequila industry. It would have forced the tequila companies to hurriedly invest in machinery and new production lines, briefly raising prices for consumers and putting tequila's competitiveness among distilled spirits at risk.

"This was the result of very long, very difficult negotiations," said Eduardo Orendain, president of the National Tequila Industry Chamber.

Though the tequila industry will now be unable to revisit the topic of bottling at the source for another five years, officials say they plan to tighten regulations for exporters and overseas handlers.

Tequila bottlers in California, for example, will have to be certified by Mexican government inspectors.