B ali is famous for terraced rice fields, surging surf, simmering volcanoes, striking temples celebrating the island’s dominant Hindu faith – and wine.

Okay, Bali isn’t Bordeaux, but you can find Sababay Winery’s Moscato d’Bali in that French region’s wine museum and order Hatten Wines’ Pino de Bali at Hong Kong’s Peninsula Hotel. This year, Bali will turn more than 1,250 tonnes of island grapes into hundreds of thousands of litres of white and red wines in the heart of Indonesia, the country with the world’s largest Muslim population, where Islamisation is on the rise and calls to ban alcohol grow louder.

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In the House of Representatives’ recently completed plenary session, Muslim party lawmakers gained support for tightening national alcohol regulations following a string of drinking-related incidents, including the gang rape of a 14-year-old by men drunk on tuak, traditional palm wine. Efforts to reach a consensus unravelled as religious and secular party legislators couldn’t even agree on what the bill would be called.

Still, prohibition threats persist. Last year, the trade ministry barred beer sales in convenience stores. As part of a deregulation drive to boost business, President Joko Widodo softened the ban by shifting implementation to local authorities, an approach the administration favours for alcohol regulation.

Local choice allows tourist centres like Bali to keep drinks flowing. But it’s also enabled Christian majority Papua and Indonesia’s second largest city, Surabaya, to approve prohibition in the name of order and public health – even though experts say a bigger health threat results from the poisonous bootleg alcohol that is encouraged by such bans.

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Regulatory uncertainties prompted leading brewer Bintang, majority owned by Holland’s Heineken, to delay a US$48 million expansion plan.

“There is no need for panic,” the Hatten Wines CEO, Ida Bagus Rai Budarsa, says. In April, Hatten opened a new headquarters in Sanur, one of Bali’s oldest tourist areas, featuring a “wine lifestyle boutique” selling glassware, wines and winemaking by-products crafted into soaps, chutneys and jams. It was a vote of confidence in the future of the island’s wine. The biggest problem for Bali’s vintners isn’t necessarily prohibition threats but trying to make wine out of the wrong grapes.

In the early 1970s, farmers in Bali’s northern highlands began growing grapes originally found in neighbouring east Java.

Vineyards now cover about 1,000 hectares in these highlands also known for coffee and strawberries, where the weather is cooler and drier than in the island’s tourism dominated south. Deep purple Alphonse Lavallée grapes are prized as religious offerings and are often seen stacked on the heads of Balinese women filing into temples in ceremonial sarongs.

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Budarsa’s family has a long history producing brem, a Balinese rice wine, and its distilled version, arak. As tourism grew, so did the demand for wine. But import tariffs reached 300 per cent and shipping the wine in tropical heat affected its drinkability.

In 1992, a friend suggested Budarsa try making wine. An Australian vintner advised that Bali’s grapes weren’t traditionally used for that purpose but might make a decent rosé. In 1994, Hatten Rosé debuted.

“At the start, we knew very little about wine,” Budarsa admits. “As we learn more, we want to know more.”

Hatten – which also produces wine with Australian grapes under the Two Islands label – has expanded its line to seven wines, including Bali best-seller Aga White, Aga Red (aga means ancient in Balinese), sparkling red and white, plus Pino de Bali, a fortified red inspired by France’s Pineau des Charentes, aged in French oak barrels for more than five years.

“We could have chosen something easier to make, but our winemaker at the time was from Charentes,” Hatten marketing adviser Maryse LaRocque says. A barrel of Pino de Bali sits in Hatten headquarters’ show kitchen and dining room, providing after dinner drinks by pipet straight from the cask. Wines are produced about 2km away, using techniques found the world over.

Hatten still buys local red grapes. But when it decided to make white wines, farmers balked at planting the pale, puny Belgia and Probolinggo Biru grapes, which are the closest to traditional wine varieties that local conditions support but unsuitable for religious offerings. So Hatten created its own 35 hectare vineyard, adding a welcome centre and observation deck to host tours and tastings.

Sababay Winery says its chairman Mulyati Gozali wants to empower Bali’s grape farmers. Sababay, near the famous Keramas surf break on Bali’s east coast, began selling wine in 2012. It produces six wines from Alphonse Lavallée and Muscat Saint Vallier grapes under the guidance of a former Hatten winemaker and has a second full-time vintner researching new varieties and growing techniques, including higher altitude plantings on the slopes of volcanic Mount Agung.

Sababay aims to reduce harvests from three to two annually. It hopes this will produce higher quality grapes while maintaining farmers’ incomes. It established a model vineyard in 2010 and has created partnerships with local farmers who follow its guidelines in exchange for guaranteed harvesting work for their wives.

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“The quality of local wines is increasing,” Bridges Bali sommelier Antoine Olivain says. The celebrated Ubud restaurant pairs Hatten’s semi-sweet Alexandria white with spicy Indonesian dishes such as beef rendang and Pino de Bali with blue cheese or chocolate desserts. Olivain calls Pino de Bali “the kind of wine that all sommeliers in fine dining look for to create an exotic and great pairing”.

“Our worst critics are people in Bali,” LaRocque says, citing Hatten’s international medals and suggesting some local restaurateurs focus more on a bottle’s label than its content. “If you do blind tastings, we do very well. It’s about terroir [the environmental factors that affect a crop]. We now have wines that match the ingredients from here.”