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Three-Roo Chuck?

Photo by: David Yellen

Posted: Jun 24, 2009 11:20am ET

Fred Franzia, the bad-boy California vintner who gave us Two-Buck Chuck, is about to release a $3 Australian white called Down Under Chardonnay. Folks in the Australian wine industry are acting like they just got their pockets picked. I am not certain which offends them more, that an American figured out how to buy up a lot of their surplus wine and package it to sell, or that it reinforces the perception that Australian wine is cheap.

Here’s a typical comment: “I realize you can't stop people making dirt-cheap wines,” Yalumba winemaker Louisa Rose told the weekly newspaper the Australian, “but I'd prefer it if they didn't have Australia written on the label.”

And another: “While value is always important for the wine world,” said importer Frank Kysela, “wine sold at these price points makes it difficult financially for producers.”

The elephant in the living room in this scenario is Yellow Tail, the Australian juggernaut with the wallaby on the label. It sells more wine by dollars in the U.S. than any other imported brand—8.4 million cases, about one-fourth of which is Chardonnay.

Other Australian vintners have a love-hate relationship with Yellow Tail. They tacitly ride Yellow Tail’s coattails to their status as big players on the import scene. On the other hand, they hate it that so many U.S. wine drinkers identify Yellow Tail’s soft, sweet style as typically Australian when it isn’t. Most Aussie wines are dry. They also hate that Yellow Tail sells for about $6 a bottle and they see it stacked up on the ends of more supermarket and liquor store aisles than any other wine out there.

In the face of Yellow Tail’s runaway success, Australia is struggling to establish an image for quality wine, which it has in spades, often for just a few dollars more. And yet Yellow Tail has spawned a menagerie of other low-priced wines, most of which feature other Australian animals on the label. And now this, a $3 bottle emblazoned with the words "Down Under."

How did it happen? Reports in Australia cite a surplus of about 5 million gallons of unwanted Chardonnay occupying tanks after the 2008 vintage. Prices on the bulk market for Chardonnay tumbled to about $1.75 (U.S.) per gallon. Let’s see … five times five, carry the two … gee, that’s about 35 cents' worth of juice per bottle of wine. At $3, that ought to be profitable.

No Australian company took advantage of that situation, partly because no Aussie wants to lower the bar on price. But it’s also because most Australian companies are desperately trying to figure out how to sell the backlog of wine they already have. It had to be a foreigner, an audacious vintner with no compunctions about offending the natives.

That would be Franzia, whose Bronco Wine Co. ruffled the Napa wine world's feathers in 2003 when he came out with a $2 California Cabernet Sauvignon, sold exclusively at the Trader Joe’s chain of discount grocery stores, under the Charles F. Shaw label. He had bought the rights to the label in 1995, when the original Shaw went out of business. Franzia just kept the brand name in his pocket until the opportunity presented itself. The wine scored a huge coup, and the sobriquet "Two Buck Chuck" entered the lexicon.

One big difference between Down Under and Yellow Tail is that the established brand is the product of a long-standing family company that buys grapes and crushed them to make wine. Down Under is assembled from surplus bulk wines, which may or may not be there next year or in succeeding years. So even if it succeeds once, can it do it again?

I haven’t tasted Down Under Chardonnay yet, but I’m hoping to get my hands on some soon. I will let you know what I think of it.

Jamie Sherman
Sacramento —  June 24, 2009 5:33pm ET
Let's face it, Franzia is one smart guy. Providing low price wine to an expanding population of wine drinkers during an economic recession. Others are probably kicking themselves for not doing the same. However, he did not destroy California wine with 2 Buck Chuck and he won't destroy Australia with Down Under. Eventually palates mature and learn to appreciate quality especially at a good price point. Personally, I always found Chuck to taste simple, dull, and occasionally like sweaty armpit.
Apj Powers
Dallas, TX —  June 25, 2009 12:27pm ET
As a self-proclaimed wine geek, I often wonder what is good wine? 8.4 million cases of Yellow Tail? Isn't it true that they export almost as much as (or more than) all of Bordeaux? I mean sometimes that kind of vote makes it seem like we have it all wrong. Still, give me a decent overpriced OR or CA Pinot please.
Apj Powers
Dallas, TX —  June 25, 2009 12:30pm ET
Harvey: sorry, off topic. I am watching your red mtn video. I will be headed to wine country in a few months. What type of video cam are you guys using. I want to get something easy to post on web/emails & small & of course, not too expensive? Any suggestions?
Harvey Steiman
San Francisco, CA —  June 25, 2009 12:44pm ET
What is good wine has nothing to do with volume and everything to do with flavor, balance, style and pleasure. Most of the top ch¿aux in Bordeaux make 20,000 to 30,000 cases, a lot for wines that cost over $100. Earlier this year I rated a $28 Cabernet (5,000 cases) from Washington 95 points. It's not uncommon for $12 wines (20,000-50,000 cases) to hover around 90.

In the end, people pay for pleasure. Those of us who have been exposed to the great wines may have a different definition of that than those who limit their options to low-priced wines. But it's always about how much pleasure the bottle can deliver, for us.

I used a Flip Mino, which slips into any pocket, to shoot the Red Mountain videos.
Apj Powers
Dallas, TX —  June 29, 2009 1:54pm ET
Thanks for the video cam tip! That's what I'm going to go with. As for the "good wine" post; I agree. I went to a luncheon with a winemaker who had done an internship at an AU 'wine factory' years ago and he mentioned some of the techniques they used. Funny and amazing!

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