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Business Customer sues Walmart, alleging 'fraudulent' marketing of its 'craft' beer

Customer sues Walmart, alleging ‘fraudulent’ marketing of its ‘craft’ beer

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If you believed the Trouble Brewing beers sold at Walmart are truly craft beers, instead of private-label beers produced at a large industrial brewery in Rochester, New York, you’re not alone. But one Cincinnati beer drinker is so mad that he’s suing the world’s largest company over what he’s calling the “wholesale fiction” around the ales, seeking compensatory damages “in an amount to be determined at trial.”

A class-action complaint filed in the Hamilton County, Ohio, Court of Common Pleas on behalf of Matthew Adam “and all others similarly situated,” alleges that Walmart used a “fraudulent, unlawful, deceptive and unfair course of conduct” to market and sell its four Trouble Brewing beers as craft beers, and because of this, “Members of the public were fraudulently induced to purchase Defendant’s Craft Beer at inflated prices.”

Ragan Dickens, Walmart’s national director of media relations, said in an email statement, “We hold our suppliers to high standards and are committed to providing our customers the quality products they expect. While we have not yet been served with the complaint, we take this matter seriously and intend to defend ourselves against the allegations.” Adam’s attorney did not respond to email or phone messages seeking comment.

The 12-page complaint, published online by Consumerist, reiterates most of the facts laid out in a story this reporter wrote last month, down to quotes from a senior buyer for Walmart’s adult beverage team: The four Trouble Brewing beers were created for Walmart by WX Brands, a company that “develops exclusive brands of wine, beer and spirits for retailers around the world.”

Though the cans say the contents were “brewed by” Trouble Brewing in Rochester, New York, no American brewery with the name Trouble Brewing actually exists. They’re actually produced at Genesee Brewing, makers of Genesee and Genesee Cream Ale, on a contract basis. Genesee is owned by North American Breweries, a subsidiary of Costa Rica-based Florida Ice and Farm, which includes breweries among its holdings.

These “statements and omissions were material to the transaction at hand,” the complaint says, “as Plaintiff would not have purchased [the Trouble Brewing beer] otherwise.”

Beyond the issue of where the beer is made, the lawsuit is partly based on the fact that it’s not craft beer, a claim that Trouble Brewing never makes outright on its label, though Teresa Budd, a senior buyer for Walmart, told me, “We were intentional about designing a package that conveyed a look and feel you’d expect of craft beer.”

The Brewers Association, a national trade group for small brewers, defines craft brewery as being small (under 6 million barrels produced per year); independent (less than 25 percent owned or controlled by a non-craft brewer) and traditional (making traditional beers, not flavored malt beverages, alcoholic sodas or other products). Further, Julia Herz, the Brewers Association’s craft beer program director, told me last month that “we do not classify contract companies as brewers because they don’t have a brewers’ notice from the Tax and Trade Bureau.”

This is not the first lawsuit filed by a consumer who alleges being misled into thinking that a product made by a large company is in fact produced by an artisan brewery or distillery, and it certainly won’t be the last. The problem is that the track record of these lawsuits isn’t very good. Last June, for example, a federal judge dismissed a case brought by a California beer lover who claimed that Blue Moon, which is owned by Coors, was marketing itself as a craft beer produced by the Blue Moon Brewing Company. The judge found that “a reasonable consumer was not likely to be deceived” by Blue Moon’s packaging or website.

In 2015, a federal judge dismissed several lawsuits against Tito’s Handmade Vodka from consumers who complained that the vodka was not, in fact, handmade as the label asserted; Maker’s Mark had similar suits dismissed the same year.

But Templeton Rye Whiskey settled a 2015 class-action lawsuit in which a man from Iowa claimed Templeton was “deceptively marketing” its whiskey as a small-batch spirit distilled in Iowa using a “Prohibition-era recipe.” In fact, it was made at the large MGP Ingredients distillery in Lawrenceburg, Indiana, and then blended with flavoring agents before being bottled in Templeton, Iowa. Consumers who had bought bottles of Templeton Rye between 2006 and 2015 were eligible for a refund of $3 per bottle, or $6 if they kept original receipts, according to the Chicago Tribune.


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