Only now is Austrian wine beginning to recover from this damaging episode. If the scandal - essentially an industrial-scale blending operation - did have a positive aspect, it was that Austrian growers, outraged that a minority of troublemakers should tarnish the reputation of their wine abroad, resolved to use the opportunity as a launch-pad for change.
New laws were introduced, tightening controls over all aspects of production. More importantly, the dangerous drift towards sweet wines was nipped in the bud. In the eight years since the scandal, a new wine culture based on quality has quietly taken root. The results are slowly filtering through to this country.
Mention Austrian wine in the high street here and a typical reaction is to think German, as if Austrian wine were merely an extension of the vapid, off-dry to medium-sweet whites that dominate the mass market.
In fact, despite the Germanic image and a justified reputation for luscious sweet wines to rival Hungary's imperial tokay, Austrian wines are for the most part dry and take their cue from a wide variety of French, central European and German grape varieties. By far the most popular, with nearly two out of every five bottles produced, is Austria's own homegrown gruner veltliner.
The few pleasantly commercial, if somewhat bland, gruner veltliners in British supermarkets give little insight into the grape's true potential. When it is estate-produced from low yields, it can match riesling for delicacy and chardonnay for richness.
It is closer to riesling in style, being an essentially fresh, crisp variety which can be delicately, deliciously fruity when fermented to dryness in stainless steel. Tending to the austerity of riesling but without its petrol-ish quality, it develops more like un-oaked chablis with a fine bouquet and a slightly peppery, sometimes smoky character that can intrigue and beguile.
Gruner veltliner, along with riesling, reaches its most delicate and intense expression in old vineyards on the upper terraces of the Danube in the Wachau. With its fairytale castles, this small enclave within Lower Austria, 80km west of Vienna, is one of the country's most picturesque districts.
Here in the village of Oberloiben, Franz-Xavier Pichler is Austria's acknowledged master of the gruner veltliner and riesling. Though his wines are not cheap, his customers cannot get enough of them. Like a number of his fellow producers in the region, such as Nikolaihof and Hirtzberger, Pichler ignores the fashionable direction of chardonnay and the international tastes dictated by barrel fermentation here or the blending of cabernet sauvignon there. According to Pichler: 'The scandal paved the way for an appreciation of the true quality of Austria's fine wines.'
Where quality is the underlying philosophy, there is room for both traditional and modern approaches. Chardonnay, known as morillon, has been grown for more than a century in Styria in the Alpine south.
Here it traditionally produces a lively, refreshing chablis style with good bouquet, in keeping with the potential of Styria's mountain vineyards for fruity, aromatic styles. Hence the importance here of traminer, sauvignon blanc and muskateller.
Increasingly though, throughout the Austrian regions, producers are turning to the burgundian technique of barrel-fermentation in small oak casks for chardonnay and the fatter, non-aromatic varieties such as pinot blanc and pinot gris. The result is that each region has its world-class exponents of the more international style of dry white wine.
One of the most exciting developments since 1985 has been in Austria's little-known red wines. Around 20 per cent of Austrian wine is red and most of it comes from the warm, gentle slopes surrounding the Neusiedlersee (Europe's biggest ice-skating lake) in Burgenland, a few kilometres from the Hungarian border.
Made from unfamiliar-sounding grapes - blaufrankisch, St Laurent, blauer portugieser, blauburgunder and zweigelt - Austria's reds tend to be aromatic and structured by acidity as much as tannin. In aroma and flavour they tend towards the cherry, raspberry and strawberry spectrum of beaujolais and burgundy rather than the blackcurrant tones of bordeaux.
Nevertheless, kicking against the anti-bordeaux orthodoxy, the new heretics are fleshing out the native varieties with cabernet sauvignon and in some instances an added coating of vanilla from new oak. Successful results to date suggest a growing trend.
Earlier this year, some of the top producers, among them Willi Brundlmayer, who produces fabulous chardonnay, and Alois Kracher, purveyor of sweet wines of unctuous richness, came to London for the Austrian Circle of Excellence tasting. The occasion was notable for two things: the quality of the wines and their almost total absence from the shelves of British retailers. This is a pity.
The good wines are expensive precisely because Austrians themselves have learnt since 1985 to put a value on them. But that is no reason to ignore them. There are, after all, enough wines around of greater reputation and price but inferior quality. Now that Austria has atoned for the sins of the fathers, the wines of the sons deserve recognition.