Napa Winemakers Question $2 Brand's Label

To wine traditionalists, California's Napa Valley is hallowed ground, and a $2-per-bottle upstart wine commonly known as "Two Buck Chuck" is stomping all over it.

Though the label of the $2 wine reads "Charles Shaw," it was not the brainchild of anyone named Charles. The wine, which sells exclusively at Trader Joe's stores, was created by Fred Franzia, who prefers to call his product a "super value wine," rather than a "cheap" one.

• How It’s Made, and How It Tastes

But Napa winemakers claim it's not the price of the wine that has them teed off. Rather, for one ex-winery owner, it's the name "Charles Shaw." For others, it's the claim "Two Buck Chuck" makes to a Napa Valley origin.

"I like the guy; I just despise his business practices," said Tom Shelton, the CEO of a Napa Valley-based premium label, Joseph Phelps, and part of a group of Napa winemakers suing Franzia to protect the "Napa Valley" name.

"I don't have a real argument with … the existence of Two Buck Chuck," Shelton said. "My argument is really is when producers like two buck chuck try to pass themselves off as Napa Valley wines."

Volkswagen or Porsche?

The label reads "cellared and bottled in Napa" which is true, but Shelton says Franzia doesn't make Two Buck Chuck with Napa-grown grapes, and that's misleading to consumers.

Shelton says Franzia doesn't make Two Buck Chuck or any of his 32 wines with Napa-grown grapes. His labels read "cellared and bottled" in Napa, which is true. But, even so, Shelton says, it's misleading to consumers.

"This really represents consumer fraud. It would be as if I were trying to pass off a Volkswagen as a Porsche." Franzia says it's all just sour grapes and snobbery, and he's won so far in court. "We'll take them on," Franzia said. "And I'm sure we will prevail legally on this topic."

Maybe so, but Franzia does have a reputation for pushing the legal envelope to the limit. He admits he was convicted of a felony a decade ago, but told ABCNEWS it was "history, about some grapes that got mislabeled," and involved "a small percentage of wine."

But the percentage was not small enough to escape a fine of $3 million and a felony conviction.

A couple years later, in 1995, Franzia bounced back to buy the Charles Shaw label for about $18,000. He has made millions with the label, which racked up $150 million in sales last year.

Still, according to Franzia, "The name is just another name."

What’s in a Name?

However, it's not just another name to one former winery owner — Charles F. Shaw.

"I just want my vintner friends in Napa Valley to know I didn't sell this name to these folks," Shaw said.

The real Charles Shaw lost his vineyard and the Charles Shaw label to his wife in a painful divorce. When she went bankrupt, Franzia snapped it up. Now, Shaw loathes having his name on a $2 bottle of wine that, he says, has forced his friends in the industry to suffer losses and layoffs, even closures.

"I'm very uncomfortable about it, and I'm upset about it, and I think it's wrong," Shaw said.

What does Franzia have to say to Shaw?

"I don't have to say anything to it," Franzia told ABCNEWS. "I own it."