DB Wines is a UK startup that launched its first brand, Sovio, this year, marketing it as a low-alcohol wine aimed primarily at women.
The wine was manufactured in Spain and bottled in the UK.
However, the Food Standards Agency (FSA) in September objected to the semi-sparkling wine, claiming that it was made using an unauthorised technique called 'spinning cone' to reduce its alcohol content to 8 per cent.
"Sovio 'wine' uses an experimental technique for the removal of alcohol called 'spinning cone', which is currently not allowed to be sold in the UK, according to regulations set down by Europe," the FSA stated.
Under an agreement with DB wines an independent assessor was appointed by the FSA to mediate the dispute.
The FSA yesterday published the decision backing the its refusal to allow the sale of Sovio Wine.
The assessor found that the product does indeed breach the regulations and the order should stand, according to the published report.
Sarah Appleby, head of imported food at the FSA, said that consumers would be misled into thinking that this product is a "natural" sparkling wine as it is currently marketed.
"The FSA is not trying to ban low alcohol wines, but this product does not comply with either the labelling rules or the legislation on wine-making methods," she stated.
"If re-labelled under a different name, not using the term wine in any way that may cause confusion with wine or table wine produced traditionally, it might be able to be sold in the UK."
DB Wines originally tried to import 3,119 cases of the rosé and white versions of the wine into the UK from Spain when the products were held up in a warehouse owned by Continental Wine & Food Ltd.
The products had been bottled in the UK and labelled as " Semi Sparking Wine aerated by addition of carbon dioxide" and state the alcohol content as "8% vol".
Under EU rules "aerated semi-sparkling wine" are designated to a product that "has an actual alcoholic strength of not less than 7% vol.
and a total alcoholic strength of not less than 9% vol."
At 8 per cent, Sovio contains 40 per cent less alcohol than most standard wines.
In his decision, assessor Richard Perkins said he did not "attach weight to the company's argument that the use of the spinning cone column in winemaking will be approved in the Community in the reasonably foreseeable future".
Sovio is bottled in 200ml single-serve screw-cap glass containers.
DB Wines claims the spinning cone technique reduces the alchol content while preserving aroma and taste.