Sovio Wines is to challenge a ruling that has banned the sale of its low-alcohol sparkling wine range.
The FSA's Wine Standards Branch (WSB) says the brand contravenes EU wine-making rules, which ban the use of certain processes to reduce alcohol levels.
Sovio Wines used an experimental technique for the removal of alcohol, called spinning cone, said the FSA, and wines using this method were not allowed to be sold in the UK according to regulations set down by Europe.
Sovio Wines, however, said that since its product was below 9% abv it fell outside EU guidelines on wine-making and could not be classified as a wine.
The company claimed the ruling could force it out of business.
"Unless this unfair decision is reversed job losses will become unavoidable," said Tony Cass, Sovio operations manager. "We have no choice but to launch a legal challenge."
The fight is being supported by the Wine & Spirit Trade Association, which is calling for an immediate lift on the ban.
"The UK government wants the alcohol industry to provide a wider range of lower-alcohol products, producers want to supply them and consumers want to drink them. It makes no sense for this product to be banned," said chief executive Jeremy Beadles.
The body is also lobbying the European Commission to allow the spinning cone technology to be used in European wine-making.
"There are no health and safety issues concerning the spinning cone process as wines from America that use the method are allowed to be sold in the UK, under the terms of a trade agreement," Beadles said.
The FSA has said that if Sovio were relabelled, and did not use the term "wine" on the packaging, the ban might be overturned. However, Sovio Wines said its labelling had been approved by Trading Standards and that use of the term "wine-based" should be allowed.