The ouzo effect, also known as the louche effect, occurs with Anisette when it is mixed with water due to the presence of anethole, an essential oil derived from anise seeds. Anethole is soluble in alcohol but not in water. When water is added to Anisette, the solution's alcohol content decreases, making it unable to hold all the anethole in solution. This causes the anethole to emulsify, creating tiny droplets that scatter light and turn the mixture milky white. This fascinating chemical reaction enhances the drink's visual appeal and softens its flavor, making it a delightful experience.