Boris Johnson has been accused of making "insulting" remarks after he told Italy's economic development minister that his country would grant Britain access to the single market – or risk losing Prosecco sparkling wine sales in the UK.

The Brexit discussion between Johnson and Carlo Calenda then descended into a squabble over whether fish and chips or Prosecco exports would be hardest hit. Recounting the incident, Calenda told Bloomberg: "He [Johnson] basically said, 'I don't want free movement of people but I want the single market.

"I said, 'no way.' He said, 'you'll sell less prosecco.' I said, 'OK, you'll sell less fish and chips, but I'll sell less Prosecco to one country and you'll sell less to 27 countries.' Putting things on this level is a bit insulting," added Calenda.

Prosecco sales in the 12 months to July reached £339m ($421.8m), according to research company IRI.

The former Italian envoy to Brussels also hit out at the perceived lack of a Brexit strategy and said Johnson's demand for access to the single market is incompatible with restrictions on free movement of people.

"Somebody needs to tell us something, and it needs to be something that makes sense," Calenda said in Rome. "You can't say that it's sensible to say we want access to the single market but no free circulation of people. It's obvious that doesn't make any sense whatsoever."

He added: "There's lots of chaos and we don't understand what the position is. It's all becoming an internal UK debate, which is not okay. The British government needs to sit down, put its cards on the table and negotiate."

Prime Minister Theresa May has said she wants to trigger Article 50 – which sets Britain's divorce proceedings from the EU in motion – by the end of March. She has insisted that while the government is devising a Brexit plan, it will not reveal its hand until negotiations are underway.

Dutch Finance Minister and Eurogroup President Jeroen Dijsselbloem also delivered a stinging attack on Johnson's vision of the UK's departure from the EU, saying that leaving the customs union while securing immigration controls and maintaining single market access were impossible.

"I think he's offering to the British people options that are really not available. For example, to say we could be inside the internal market but be outside the customs union, this is impossible, it just doesn't exist. The opposite does exist. We have a customs union with Turkey but Turkey is not part of the internal market," said Dijsselbloem.

"He's saying things that are intellectually impossible, politically unavailable, so I think he's not offering the British people a fair view of what is available and what can be achieved in these negotiations," he added.