[Exim] "authentication required but server did not advertise…

Hello,

I told exim that it should authenticate itself to the smart host by
putting

hosts_require_auth = smtp.smarthost.org

in the transport definition -- after I had checked that it was supported:

$ telnet smtp.utopix.net 25
...
ehlo
250-smtp.smarthost.org Hi.
250-PIPELINING
250-AUTH=LOGIN
250 8BITMIME
quit

What could be the reason for exim saying the "server did not advertise
AUTH support" ??

Thanks & Regards,
Robert.