The blessing of wine mixed with water:
General rule: If one mixed water into wine then all the following conditions must be met for the wine to retain its blessing of Hagafen: 1) The mixture contains at least 17% of wine. 2) The strength of the wine justifies the amount of water placed in. 3) It is common to drink this beverage as wine, in its current ration.
Practical law for wine of today: Practically, if there is majority of wine [51%] over water in the mixture, its blessing remains Hagafen. If the wine is minority of the mixture [less than 50%] then many Poskim rule the mixture becomes Shehakol and is not Hagafen, and so is the widespread Sefaradi custom. Other Poskim rule that so long as the wine is 17% [1:6 ratio] of the mixture, it remains with the blessing of Hagafen. According to all opinions if the wine is less than 17% of the mixture, the mixture is Shehakol. Practically one is to be stringent not to add more than majority water to the wine, however those that are lenient to say Hagafen on mixtures of up to 17% wine, have upon whom to rely. Most bottles of wines today already contain a large percentage of water mixed into them and hence care must be taken not to add too much water in the wine. [All the wines of the Eida Hachareidis have between 60-70% wine and are Hagafen according to all opinions, including the Sefaradi custom. Other wines, even under Mehadrin Hashgachas, may contain less than majority wine and are hence not Hagafen according to all opinions. This matter needs to be verified by each Hashgacha.]
Chabad custom: There is a tradition from the Alter Rebbe, as explained in the Tzemach Tzedek, that in today’s wines the maximum amount of water allowed to be added is up to 1/3 or 33.3%. This is the practical Chabad custom.
 Admur 204/9; Seder 7/6; Rama 204/5; M”A 204/16; Maharil 153
The Michaber 204/5 rules that if the ratio of wine to water is 1:4 [25% wine] then it remains Hagafen. If however there is less than 25% wine, then the blessing is Shehakol even if the mixture still contains a taste of wine. Furthermore, even the 25% ratio only applied to wines of back then, however by the wines of today, even if the mixture contains 25% wine it is Shehakol. Practically each area is to follow the ratio of mixture between wine and water of that area. [Michaber ibid] The Rama ibid concludes that this applies so long as that there is at least a ratio of 1:6 of wine to water [16.7% wine], as if it has less than this amount of wine the mixture is Shehakol. [Rama ibid based on Iggur and Maharil 153] The reason why according to the Rama a ratio of 17% suffices is because in such a case we follow the taste of the mixture, and so long as the mixture still contains a taste of wine, then its blessing is Hagafen. [Olas Tamid 204/7 in explanation of Rama ibid] The M”A 204/16 in name of Maharil ibid states that even if there is a 6:1 ratio of water and wine, nevertheless it is only Hagafen if it is common for the community to drink a mixture of this state as wine. Practically Admur [in 204/9 and Seder 7/6] rules like this ruling of the Rama ibid as explained in the M”A ibid that only “if the wine is very strong and is hence fit for such a mixture of water and it is common for people to drink it as wine despite its water ratio, does it remain Hagafen. However in all cases that the water is a ratio of 6:1 over the wine [17%] it becomes Shehakol.” Thus in conclusion Admur ibid, based on M”A and Maharil ibid, list three conditions necessary for wine to remain Hagafen: 1) There is at least 17% wine. 2) The strength of the wine justifies the amount of water placed in and 3) It is common to consider such a ratio as wine.
Ruling of the Mishneh Berurah: The M”B 204/29 and 31 learns that the Michaber and Rama ibid are not truly arguing and that rather each one is referring to another type of wine. The Michaber refers to a grape sediment wine, while the Rama refers to pure wine, and hence by pure wine even the Michaber would agree with the Rama. However from other Poskim ibid [see Kaf Hachaim 204/31] it is clearly evident that the Michaber and Rama are arguing.
 Admur ibid; Rama ibid
 Admur ibid; M”A ibid; Maharil ibid
 Admur ibid; M”A ibid; Maharil ibid; implication of Rama ibid
 See 204/5; Admur 204/9; Seder 7/6; Piskeiy Teshuvos 204/8; Sefer “Kashrus Hamashkaos” p. 26-28
 See all Poskim listed in next footnote that state that such wine is Hagafen
Other Poskim: Some Poskim rule that even if minority of water was added to wines of today it becomes Shehakol. [Olas Tamid 204; Elya Raba 204/10; Aruch Hashulchan 204/13] Practically we do not rule like these opinions.
 Peri Megadim 204 A”A 16; Kaf Hachaim 204/32; Shulchan Hatahor 10; Chazon Ovadia 1/80 that so rules also Levush; Elya Raba and Machatzis Hashekel; Pnei Haryeh Hachaiy 38; Poskim brought in Piskeiy Teshuvos ibid footnote 30; Yalkut Yosef 4/1 p. 281
 Chazon Ovadia ibid; Or Letziyon 2/20-18; Yalkut Yosef ibid
 This follows the simple ruling of the Rama ibid that rules so long as the wine is at least a 1:6 ratio [17%] its blessing is Hagafen. This opinion is commonly referred to as the Ashkenazi custom and was/is followed by many Hashgacha companies. Nevertheless it is debated as to whether the ruling of the Rama referred to even the wines of today.
Opinion of Admur and Chabad custom: It is unclear from Admur ibid if this ratio would suffice for the wines of today, as perhaps the wines of today do not fulfill the other two conditions proposed by Admur. I was told by Harav Eli Landa of Bnei Braq that there is a tradition from the Tzemach Tzedek that in today’s wines the maximum amount of water allowed to be added is up to 1/3 or 33.3%.
 Piskeiy Teshuvos ibid
 Piskeiy Teshuvos ibid
 Publicized in Madrich of Eida Hachareidis in answer to those that still claim that their wines are Shekaol according to many Poskim. In the past the Eida wines contained close to 20% wine, hence only being valid according to some opinions.
 See Sefer “Kashrus Hamashkaos” p. 26-28 and Chazon Ovadia ibid
 Tzemach Tzedek Orach Chaim 28
 Told by Harav Eli Landa of Bnei Braq; Rav Ginzberg in Hiskashrus