Australian Winery Sues Franzia Cos Over New Australian Wine

 NEW YORK (Dow Jones)--The Australian winery that produces [yellow tail] wine has sued two companies affiliated with Fred T. Franzia, the vintner that produces an ultralow-priced wine nicknamed "Two Buck Chuck," over the introduction of a low-cost Australian wine.

The lawsuit, filed in U.S. District Court in Manhattan on Wednesday, alleges Bronco Wine Co. and Barrel Ten Quarter Circle Inc. have introduced an Australian Chardonnay under the name [Down Under], with a label that infringes on Casella Wines PTY Ltd.'s trademarked label for [yellow tail].

Casella claims the [Down Under] labels are substantially similar to Casella's trademarked label, which pictures a wallaby and has brackets as part of the name.

"Bronco's use of Casella's iconic square brackets and its use of Australian-centric wording in connection with the sale of Australian wine are likely to confuse consumers," the lawsuit said.

Franzia is the chief executive of Bronco, which produces an ultralow-cost wine under the Charles Shaw label that is sold at Trader Joe's stores and is nicknamed "Two Buck Chuck."

Bronco, in part, buys wine in bulk for pennies on the dollar from vineyards that need to dispose of excess wine before the next season. It then often sells the wine for $1.99 to $4.00 a bottle, according to the lawsuit.

Casella sells its [yellow tail] wine for about $7 a bottle, according to the complaint.

Last year, the cost of surplus Australian Chardonnay fell to about 60 cents a liter - an extraordinarily low and unsustainable price, according to the lawsuit.

Bronco purchased unwanted bulk Australian Chardonnary at record-low prices at the end of the 2008 season, the lawsuit said.

A spokesman for Bronco didn't immediately have a comment when reached Thursday.