Los Angeles Times, January 21 2009:
Is this the end of Two Buck Chuck?
A proposal to raise the state tax on wine to a level more than six times higher to help close California’s giant budget deficit would kill the $1.99 price for Charles Shaw wine, said Fred Franzia, who created the famous label sold by the Trader Joe’s grocery chain.
Charles Shaw, of course, is the formal name for the California wines sold since 2002 that are now widely known by their nickname Two Buck Chuck.
The proposal by Gov. Arnold Schwarzenegger would raise the tax on wine to 29.6 cents for a 750-milliliter bottle from 4 cents.
“It’s like shooting Charles Shaw in the eye,” said Franzia, chief executive of Bronco Wine Co., which owns the brand. The profit margin is already so low we will have to raise the price.”
. . .
Franzia said he wasn’t sure what the new price would be — it would have to be worked out with retail partner Trader Joe’s — but $2.29 or $2.49 Chuck would not be a surprise, according to industry analysts.
Trader Joe’s, which introduced the wine seven years ago and has never raised the price, declined to say whether it had a stand on the proposed tax and would not talk about its plans for the wine.
Charles Shaw fans are divided on whether the tax is a good idea.
“Two Buck Chuck is a nice wine, and the price is wonderful. You can drink it or use for cooking, and it’s not very expensive,” Jim Elsten of Long Beach said while shopping at a Trader Joe’s in Long Beach last week. “I think it would still be a good deal at $2.29 or $2.49. Wine is a luxury, and I don’t see an extra tax as a problem.”
