The EU is attempting to increase trade barriers to wine imports from the New World and Australia's exports to the continent will be undermined, a report released today has said.

The Australian Bureau of Agricultural and Resource Economics (ABARE) report said Europe was not afraid to use trade barriers to regain ground its wine producers had lost to New Worrld competitors. As a consequence, Australian producers faced lower world.

"Barriers to trade in world wine markets will continue to impede the Australian wine industry's efforts to find expanded markets ..," the report said.

Packaging and labelling laws were identified by ABARE as a prime example of the methods the EU will employ. It said the EU would restrict imports of wine that failed to meet its strict labelling requirements.

"These rules can require New World producers to label their wine in a way that raises doubts in consumers' minds about its quality," it said.

Author David Spencer said: "I think that a lot of the labelling issues will definitely stigmatise the wine in the eyes of uninformed consumers and I think that's a definite barrier to trade. Under the WTO arrangements they are allowed to discriminate in this manner, it is up to the country to set these standards but they are to be based on scientific assessment."