Two-buck Chuck maker offers $4 Napa version

updated 5:40 p.m. ET July 6, 2005

NAPA, Calif. - First came Two Buck Chuck. Now, there's Four Buck Fred.

Central California vintner Fred Franzia, who has been fighting a state law requiring that wines with "Napa" on the label be made from grapes grown in that exclusive region, is releasing two new wines under his Napa Creek label, both going for $3.99 a bottle.

The twist: This time the wines are actually made with grapes from Napa.

"This shows that you can put Napa Valley wine in there for the price that we're doing," says Franzia. "People want to buy things at a reasonable price that are good value. It's not new. It's America."

In Napa, where wine is more likely to cost $40 than $4 a bottle, the release was a chardonnay shocker.

"Fred Franzia's chucked another volley our way," was the headline of a column on the St. Helena Star's Web site.

Some vintners wondered how Franzia could possibly be making a profit on the new wines. (He'll say only, "I don't do anything unless I make money.")

Others couldn't help but smile.

"I'm glad to see Freddy using Napa Valley grapes in Napa Valley wine," Mike Moone, founder of the boutique winery Luna Vineyards, said with a chuckle.

Moone thinks Franzia is doing Napa Valley a service by buying up surplus inventory. He notes that a large company like Franzia's Bronco Wine — which controls everything from vineyards to delivery trucks — is in a unique position to cut costs.

But most wineries can't make those economies of scale, says Karen MacNeil, author of "The Wine Bible" and chair of the wine department of the Culinary Institute of America's California branch.

"When people buy wine they have this romantic picture of a husband and wife and he's out on the tractor and then later that day they come in and make the wine and hand label the bottle," she says. "You think to yourself, 'It really ought to cost $4.' But in point of fact, it's like the restaurant business in that it's enormously costly."

The price of an acre of Napa Valley vineyard land can easily reach six figures. The average price for cabernet sauvignon grapes here is $4,000 a ton, compared to a statewide red grape average of about $600.

Then there's planting, harvesting, bottling and paying people to keep up the myriad regulations. Vintners also have to keep at least three years worth of inventory on hand, often in expensive oak barrels.

"There's a good reason why there's that popular quote, 'The way to make a small fortune in the wine business is to lose a big one,'" says MacNeil.

Costs aren't the only factor in pricing a wine. There's also supply and demand.

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