Numerical investigation of a Mach-Zehnder interferometer implemented by steering self-collimated acoustic beams in a two-dimensional phononic crystal is presented. Mirrors of the interferometer are optimized by modifying the radii of the steel cylinders in water so that the working frequencies lie in a band gap. The beam splitters optimized in a similar manner ensure equal splitting of the beams. In the all water case of host liquid, the interferometer operates unidirectionally such that transmission throughonly one of the two output terminals is achieved. Corresponding transmittances are 85.9% and 6.0% for the transmitting and blocked terminals, respectively. The device can be utilized in sensing variations in the weight fraction of ethanol in water in a cell on the path of one of the two split beams. Phase difference accumulated in the sample cell varies linearly with ethanol weight fraction up to 15%. Contrast ratio of the calculated transmittances can be used as a measure of ethanol content in water, as it varies as a cosine function of ethanol weight fraction. (C) 2014 Elsevier B. V. All rights reserved.