Prosecco’s ‘Little Italy’: Strong with Croatia, Weak with Australia

After years of diplomatic and commercial tension over identity issues such as the Prosecco name, the European Union is showing a softer line toward Australia on the wine front. This is the paradox emerging from the new free trade agreement between Canberra and Brussels, announced on March 24, 2026, after eight years of negotiations. An agreement that will have direct effects on the wine sector, but which raises questions about the consistency of European—and Italian—strategy in defending denominations.

To be clear, the reaction in our neck of the woods—from the three Consortia to unions like Coldiretti—is that of a weak “Little Italy” that is submissive to the powerful and harsh with the weak. Tough on Croatia over the trivial Prosek issue, a Dalmatian designation totaling just 80,000 bottles a year. And weak with Australia, a country that has everything to gain from the EU agreement by securing the use of the term as the name of the grape variety, replacing its “substitute,” Glera.

In short, if the ‘little victory’ over Croatia served some to puff out their chests, announcing a presumed Italian revenge regarding the Tokaj-Friulano issue with Hungary, the agreement with Australia and the substantial silence of those who even dared to link Prosek to ‘Italian sounding’—one of the lies of the century from wine’s ‘Little Italy’—bring everyone back down to earth.

The heart of the agreement is trade liberalization: approximately 98% of Australian exports will enter the European Union duty-free. Among the products involved is wine, with an estimated benefit for Canberra of about $37 million a year.

Australian Prime Minister Anthony Albanese claimed the result with an explicit statement: “This agreement will open new and significant opportunities for Australian exporters and bring concrete benefits to the country’s businesses, workers, and families.” A passage that summarizes the Australian vision: facilitated access to the European market and greater competitiveness for agri-food products. Wine included.

The most delicate point concerns European geographical indications. The agreement provides for the recognition and protection of numerous EU denominations, but does not fully resolve the Prosecco knot. Australia continues to consider “Prosecco” as a grape variety name. This position has already been contested by Italy in international forums.

An approach that had led to much harsher tensions in the confrontation with Croatia over the “Prosek” case. The difference in approach is evident: firmness (and lies) against Zagreb. Greater flexibility with Canberra. Hence the necessary criticism of an inconsistent management of denomination protection. Or rather, of the same denomination.

The elimination of tariffs will favor the entry of Australian wines into the European market, increasing competitive pressure especially in the mid-price ranges. For European producers—Italians first and foremost—the risk is not so much in the premium segments as in the competition on volumes and commercial positioning. At the same time, European wines will also benefit from more favorable conditions in Australia. However, the balance between advantages and risks remains open.

The agreement involves the entire agri-food sector: fruit and vegetables, dairy, cereals, honey, olive oil, and seafood. Most tariffs will be eliminated. However, not all supply chains welcome the agreement with enthusiasm. Some Australian agricultural sectors, particularly meat, have expressed reservations about market access quotas in Europe. The result is a compromise: significant opening, but with limits on sensitive products.

The deal does not only concern goods. It also includes services, investments, and access to European public procurement, estimated at hundreds of billions of euros. Simplifications for the recognition of professional qualifications and greater labor mobility are also planned. An element that confirms the strategic nature of the agreement, well beyond the agricultural sector alone.

The Australia-Prosecco case highlights a structural tension in European trade policy. On one hand, the defense of geographical indications; on the other, the need to forge global agreements. For Italian wine, the issue is crucial. The protection of denominations represents one of the sector’s main assets.

But the differentiated management of the dossiers—Croatia versus Australia—risks weakening the overall credibility of the system. The Australia-EU agreement leaves a fundamental question open: to what extent are Europe and Italy truly willing to defend their denominations?