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NAPA, Calif. — First there was Two Buck Chuck. Now, there’s Three Dolla Koala.

Fred Franzia, the vintner who shook up the California wine world seven years ago with Charles Shaw wines — nicknamed Two Buck Chuck because they sell for $1.99 in some states — has come up with Down Under, a chardonnay made of imported Australian bulk wine and priced at around $2.99 in California.

His goal is to take on popular imports such as Yellow Tail.

“It’s time that the American consumer paid the correct price for Australian wine. They’ve been overpaying for it,” says Franzia.

In Australia, John Casella, managing director of Casella Wines, which makes Yellow Tail, took the news phlegmatically.

“A lot of brands compete with Yellow Tail and this will be another,” he said.

The “three dolla koala” marketing slogan plays off the koala on the label, though in the national campaign the wine is touted as “more for your dolla koala,” since tax differences mean consumers in some states will pay more than $2.99.

Down Under doesn’t have the mysterious allure of Two Buck Chuck, which burst onto the wine scene in a flurry of rumors — It was wine an airline couldn’t take because it required a corkscrew in the post-Sept. 11 world; It was a discontinued high-end wine being dumped on the market.

But it is hitting the market at a time when Americans are showing a distinct fondness for cheap, or as the industry likes to call it “supervalue,” wine.

“It’s very clear that people are looking for bargain products and it’s certainly true in wine,” says Jon Fredrikson of Gomberg Fredrikson & Associates, the Woodside-based consultants who track wine sales.

California wine shipments domestically were up 5 percent through April, compared to the same period a year ago, for a total of 60.1 million cases, he says. Much of the growth came from wines priced below $7, which were growing at between 8 percent and 9 percent.

And there have been some pleasant surprises for consumers moving down supermarket shelves.

“A lot of people were shocked at what they found because many inexpensive wines are a heck of a lot better than people thought,” says Fredrikson.

Down Under rolls out nationally in July, available at the Trader Joe’s grocery store chain and other supermarkets, and a red wine is planned to follow if the chardonnay is received as well as expected.

Casella, for one, doesn’t think Down Under will win over the long haul.

“It’s not sustainable,” he says, noting that Australia is currently experiencing a wine glut and its currency is recovering strength against the U.S. dollar after a sharp downturn.

Franzia maintains that he is cutting costs by importing the wine in bulk, saving the expense and environmental impact of shipping regular bottles, and is having it bottled — in lightweight glass — labeled and shipped in California, all operations where he can control expenses.

Franzia also keeps the cost of his California wines down by owning huge tracts of vineyards, but he doesn’t plan to start buying land in the southern hemisphere.

“If I can’t get there in four hours I’m not interested,” he says dryly.

Meanwhile, Two Buck Chuck — which many thought couldn’t survive at that price — is on pace to reach 500 million bottles sold since its inception by year’s end.

What’s next?

“We’re trying to straighten out Australia,” says Franzia, “then who knows where the next country is, the next opportunity.”

© 2009, The Associated Press. All Rights Reserved.
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