My Round: Madeira mixes things with the best

Madeira is famous for fortified wine, but what the locals can really teach us is how to make a lethal cocktail

Octavio Sousa is pounding lemon peel and sugar with his caralinho. The English word for this wooden implement, a basic tool of bartending, is muddler. In Portuguese, Sousa tells us, the official name is mexelote. But caralinho, the unofficial name, translates literally as "little cock" – a much more picturesque rendering in anyone's book. Which makes sense, because the picturesque features large in the setting for Sousa's Bar do Mar in Camara de Lobos, on the island of Madeira. Sousa is using the little cock to fashion poncha, a local drink with synapse-sapping potential.

Octavio Sousa is pounding lemon peel and sugar with his caralinho. The English word for this wooden implement, a basic tool of bartending, is muddler. In Portuguese, Sousa tells us, the official name is mexelote. But caralinho, the unofficial name, translates literally as "little cock" – a much more picturesque rendering in anyone's book. Which makes sense, because the picturesque features large in the setting for Sousa's Bar do Mar in Camara de Lobos, on the island of Madeira. Sousa is using the little cock to fashion poncha, a local drink with synapse-sapping potential.

How is it that once again I go to a place to learn about wine and end up in a cocktail bar? In Camara do Lobos, it's as easy as falling off a barstool. If you held your breath and walked out of the Bar do Mar, you would pass three other bars before you needed to draw breath. Madeira has a long and venerable tradition of cocktail-making, based partly in the island's colonial past and partly in local drinking habits. The colonial side is best exemplified at Reid's Palace Hotel, the most famous and exclusive on the island, where they serve Martinis, Manhattans and all the other classics. The demotic side is exemplified by the cheap, explosively fiery rum (here called aguardiente) which forms the alcoholic basis of poncha.

A traditional poncha, which is what Sousa is making for us, contains just lemon, sugar, aguardiente and some honey to soften the impact of the spirit. It takes around five minutes to make, unless you dispense with the little cock and use a food processor. At €2.50 (around £1.75) it is a cut-price cutie, Madeira's indigenous addition to the noble family of sours: cocktails based on the principle of high acidity balanced by sweetness. Sousa claims that poncha is the origin of the much more famous caipirinha. Since the Portuguese were the people who colonised Brazil, his claim makes perfect sense.

The Bar do Mar is not simply a cocktail bar, it's a piece of Madeiran history. It began life around 1880 as the "Maritima" general store, founded by Sousa's great-great-grandfather, and remnants of its past are displayed behind the plain wooden bar: an ancient coffee grinder, scales, battered storage tin with the words "Cacau Raja" in faded type. Sousa took the place over last year and renamed it. He has live music at weekends, sometimes performed by himself – when not running the bar, he's in the music business in London as well as Madeira. And while Camara de Lobos is still a fishing town, the Bar do Mar is cosmopolitan. Apart from those ponchas, the cocktail list would not look out of place in any European capital.

Cocktails are a part of the island's drinking culture. John Cossart, of the great Madeira house Henriques & Henriques, says that his father developed the company's bone-dry Monte Seco Madeira in 1938 in response to the threat of war. "Martini drinkers were worried that they would lose their supply of Noilly Prat", and Monte Seco was created as a home-grown alternative. Monte Seco tastes pretty good in Martinis, though I don't think it will ever replace vermouth. At Reid's hotel, the ultra-refined bar makes them the old-fashioned way – they're as good as any I've drunk in New York or London. Who'd have thought that an island off the coast of Portugal is a cocktail-hound's paradise?

But if I could only drink cocktails at one of Madeira's hotspots, I'd choose the Bar do Mar. I'd stick with the traditional poncha, rather than the passion-fruit version (delicious though it is) or any of their other variations. One of my drinking companions, Christine Austin of the Yorkshire Evening Post, described traditional poncha as an "alcoholic Strepsil". I couldn't put it better. I'd go back for another one any time I'm asked. *