All Posts by Dan Coles

Gratuity Included: The Timothy Brown Class Action

Restaurants banning tipping and transitioning to “gratuity included” pricing is not a new concept. While such arrangements rarely last, from time-to-time news breaks of avant-garde restaurateurs who attempt to throw off the tipping yoke, and launch eateries where management (and not patrons) have control over staff compensation leading (in theory) to a more equitable workplace. The thought process is that gratuities left to wait staff, even in establishments that engage in some form of tip pooling, are rarely distributed “fairly” to the important people who work in the kitchen, clear the tables, and take the reservations. The solution? Mark-up menu prices by 20% and pay all staff a living wage.

This solution sounds nice, but the industry to date has struggled to successfully implement it. The truth is that in North America tipping is ingrained in the psyche of both patrons and wait staff; it’s a significant social convention that is not easily altered. The economics of the practice are also important to consider. Most bars and restaurants take for granted that they can pay their floor staff minimum wage, and in many jurisdictions, including British Columbia,  legislation allows for a lower minimum wage for those that sell alcohol. Paradoxically, most bars and restaurants attempt (as best as they can) to employ attractive, educated and charismatic individuals – the very same type of people who try and avoid working for minimum wage when they can. Here gratuities bridge the gap that would otherwise exist between ownership’s downward pressure on staffing costs, and the public’s desire to be waited on by motivated and knowledgeable servers and bartenders. Put more simply, the kind of people you want waiting on you are willing to work for minimum wage because the upside of collecting tips in cash each night makes it worth their while. Take that upside away, and those individuals will look for better remuneration in other lines of work.

The “gratuity included” model attempts to rework this long-standing framework by marking-up all menu items under the premise that the mark-up will be carved off from the general revenue of the restaurant and then redistributed equitably amongst the staff by benevolent management. To work, patrons are required to accept inflated prices and relinquish the control they have over their choice to leave a tip. Similarly, restaurant staff have to believe that management can be trusted to collect, account, and distribute the “gratuity included” portion of the establishment’s revenue in a manner that is more just than under the traditional regime. For kitchen staff this model is appealing, as they are largely excluded from meaningful sharing in tip money; for floor staff this model invariably results in reduced income.

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Diageo v. Heaven Hill: Passing off in the liquor industry

Earlier this summer Mr. Justice Boswell of the Federal Court of Canada released his decision in Diageo Canada Inc. v. Heaven Hill Distilleries, Inc., which resolved a trademark and passing off dispute between two significant players in the liquor industry. At issue in Diageo v. Heaven Hill is the similarity in Diageo’s Captain Morgan mark, and Heaven Hill’s Admiral Nelson mark. Both marks are used by their respective owners to identify and market their lines of rum.

Passing off exists at common law as a tort, and is prohibited under s. 7(b) and (c) of the Trade-marks Act.

What is Passing Off?

The procedural aspects of Diageo v. Heaven Hill are somewhat complex, and need not be repeated. For Alcohol & Advocacy’s purposes the salient issue is this: Has Heaven Hill been passing off its Admiral Nelson rum products as the goods of Diageo in contravention of the Trade-marks Act?

The principles behind the common law and statutory prohibition against a manufacturer passing off its goods as those of another (usually its competitor) are not difficult to understand: a manufacturer who has invested in developing goodwill (brand recognition) in its products does not want to lose business (and potentially its reputation) to a competitor who is selling its products in a way that confuses consumers into believing that its product is the “original”. Similarly, consumers have an interest in being able to readily distinguish the origin of the products they are purchasing based on the product’s packaging, design elements, or logos.

Passing off can occur in any variety of ways. Obvious examples include counterfeiting or imitating the plaintiff’s trade mark or trade name, but more subtle examples include imitation of the plaintiff’s product wrappers, labels or containers, its vehicles, the badges or uniforms of its employees, or the appearance of its place of business.

The plaintiff in a passing off action does not need to prove that the defendant was deliberately attempting to pass its products off as the plaintiff’s, rather the misrepresentation creating confusion for consumers can occur through negligence or carelessness. Put more simply: even if by complete coincidence your company’s beer, wine or spirits happen to look like a competitors, your company may still be found liable for passing off.

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Understanding Social Host Liability

Alcohol & Advocacy has previously examined the law of commercial host liability in British Columbia. Today most patrons and employees of licensed establishments are familiar with the concept of commercial host liability: bars and restaurants owe a duty or care to ensure that if their patrons become intoxicated they do not harm themselves or others who come in contact with them. The classic example of a situation where a commercial host will be found liable is when an over-served customer gets behind the wheel, and later harms another user of the road.

But what about social hosts (e.g. non commercial situations) like dinner parties or neighbourhood barbecues? Does the law hold social hosts to the same standard of responsibility for guests as it does with commercial hosts? Here we examine the law of social host liability.

In 2006 the Supreme Court of Canada in the leading decision Childs v. Desomoreaux posed the following question:  A person hosts a party.  Guests drink alcohol.  An inebriated guest drives away and causes an accident in which another person is injured.  Is the host liable to the person injured?

The court concluded that “as a general rule” a social host does not owe a duty of care to a person injured by a guest who has consumed alcohol.

Facts

The facts in Childs, like most host liability decisions, arise from a tragic car accident. In the early hours of the morning on January 1, 1999 Mr. Desmoreaux drove his vehicle into oncoming traffic, killing one of his passengers and seriously injuring three others including the plaintiff Ms. Childs. Zoe Childs, who was at the time a teenager, had her spine severed by the accident and has since been paralyzed from the waist down.

Mr. Desmoreaux was impaired at the time of the accident. Prior to getting behind the wheel he attended a house party hosted by Mr. Courrier and Ms. Zimmerman. The house party was a BYOB event; the hosts only supplied a minimal amount of alcohol (Champagne at midnight). During his two and one half hour visit to the party he consumed about 12 beer.

Mr. Desmoreaux pleaded guilty to a series of criminal charges arising from these events and received a ten-year sentence.

The central issue before the court in Childs was whether social hosts who invite guests to an event where alcohol is served owe a legal duty of care to third parties who may be injured by guests who become intoxicated. Though it has long been the law in Canada that commercial hosts, like bars or clubs, will likely be under such a duty the Childs case was the first time the Supreme Court of Canada considered the duty owed by social hosts to plaintiffs like Ms. Childs.

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Yukon Liquor Corporation Contemplating Tax Break for Local Brewers

The Yukon Party are making headlines again up north by revisiting (from the opposition benches) a plank from their unsuccessful 2016 election platform:  eliminating the government markup on locally produced alcohol and allowing producers to sell directly to retailers.

Currently the Yukon Liquor Corporation applies a 23 percent markup to packaged beer produced by the territory’s small producers like Winterlong Brewing. This means that before Winterlong’s beer is sold in its tasting room, the company has to first sell it to the Yukon Liqour Corporation and then buy its own beer back with a mark-up tacked on. Last year in Ontario the Toronto Distillery Co. unsuccessfully challenged the Liquor Control Board of Ontario’s policy that is substantially the same.

It is unclear whether a Yukon Liquor Corporation policy that would exempt local producers from a markup would be compatible with Canada’s NAFTA or other free trade agreement obligations. Similar concerns have been raised in British Columbia about the policy of permitting only locally produced wine to be sold on grocery store shelves.

The Yukon News is reporting that the Yukon Liquor Corporation intends to review its policies over the next year and consult with producers as well as the public. Alcohol & Advocacy will be monitoring the situation closely.

*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.

Contravention Notice:  Failing to promptly produce and submit a record

A licensee in British Columbia may receive a Contravention Notice from the Liquor Control and Licensing Branch for a variety of reasons; serving minors and over-serving patrons are two of the most common. However, another issue arises with more frequency than most managers and owners probably realize: failing to promptly produce a record or thing for inspection.

On February 7, 2017 the General Manager of the Liquor Control and Licensing Branch released its reasons in Re Liquid Zoo Show Lounge EH16-095. In Re Liquid Zoo the Branch fined the licensee $10,000 for its failure to promptly produce requested information.

The Liquid Zoo is a strip club and lounge in Kelowna that operates under a liquor primary licence. The Liquid Zoo’s licence contains a number of unique “special” terms and conditions that include onerous requirements concerning the mandated use of video surveillance throughout the establishment, and providing liquor inspectors and police with unhindered access to the same.

On July 14, 2016 a liquor inspector issued the Liquid Zoo a Notice to Provide Records that required the licensee produce employee records and certain days’ worth of video surveillance footage. The licensee failed to produce the requested information promptly and the liquor inspector issued a contravention notice.

Section 73 of the old Liquor Control and Licensing Act, and section 42 of the new Act, give the Liquor Control and Licensing Branch broad powers to demand from licensees records that the licensee is required to keep under the Act as well as any other “record, thing or sample.” Put simply, to further an investigation into a suspected violation of the Act, or a term or condition of licence, a liquor inspector can ask the management of a bar, restaurant or manufacturer to produce just about anything.

Section 34 of the old Regulation, now section section 80 of the new Regulation, sets out the type of record-keeping licensees are required to maintain for a period of at least 6 years. These records include: liquor purchase and sale records, food sale records, contacts with other licensees, management contracts, employee records (including name, salary, addresses, shift schedules) and records of incidents.

Licensees should note that in Re Liquid Zoo the liquor inspector declined to state the specific nature of the alleged contravention of the Act being investigated. In his reasons the General Manager’s delegate held that “ the fact that the [ contravention notice ] did not identify the specific nature of a possible contravention does not affect the reasonableness of the timeline or the validity of the request.” He went on to find that “the [ contravention notice ] is clear on its face as to what was required” and that “it is the licensee’s responsibility to ensure that he provides all the records required by the branch.”

Alcohol & Advocacy has written about the importance of complying with a liquor inspector’s demands for documents promptly and thoroughly before. It is a subject the Branch takes very seriously. The Branch deems a failure by a licensee to provide records  a “serious contravention that undermines the regulatory compliance and enforcement regime.” Without access to records associated with the operation of a licensed establishment, the Branch considers itself unable to identify serious contraventions that pose an unacceptable risk to public safety.

If a liquor inspector asked your manager or bookkeeper to produce employee records, sales information, or an incident report from six years ago could they? If the answer is “no” you should revisit with your staff how your licensed establishment is managed and operated. If you have questions about how to avoid receiving a contravention notice, or complying with the Liquor Control and Licensing Act contact Dan Coles at Owen Bird.

*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.

So you want to become an Import Agent?

All imported beverage alcohol sold in British Columbia must be registered with the Liquor Distribution Branch (LDB) and represented by an agent licensed by the Liquor Control and Licensing Branch who holds a valid letter of authorization from the manufacturer.

Prior to 2017 British Columbia manufacturers of beer, wine and spirits were required to obtain a separate agent licence to market their products within the province, or retain a licensed third-party agent. This is no longer the case; under the new Liquor Control and Licensing Act manufacturers can now solicit and take orders for their own products without additional licensing requirements. However, some manufacturers continue to retain the services of a third-party agent (e.g. smaller breweries or distilleries in remote regions who require representation in Vancouver. Others may simply prefer to rely on the expertise and industry connections of existing agents rather than employing their own sales and marketing team).

The role of liquor agent in British Columbia is somewhat unusual: agents cannot directly sell to the public or import products.  Only the Liquor Distribution Branch is permitted to commercially import alcohol in British Columbia, and only licensed establishments and retail stores can sell alcohol directly to the public.

So what exactly do import agents do?

Liquor agents have exclusive rights to promote and market their products throughout British Columbia and in doing so are permitted to take wholesale orders for liquor and request and that LDB import products on their behalf. The LDB describes this process as agents facilitating the movement of products from manufacturer to customer via a “promotional strategy.”

Promotional strategies include conducting product tastings and information sessions,  purchasing advertisements, sponsoring events, and distributing branded promotional items.

An import agent may (and many do) represent a variety of brands and products, and hire employees as “marketing representatives”.  The licensee is responsible to ensure that its staff follow British Columbia’s liquor laws and the terms and conditions of the agent licence.

So who actually imports the alcohol?

The LDB along with the Liquor Control and Licensing Branch are responsible for supplying and managing the beverage alcohol industry in British Columbia.

The Liquor Distribution Act gives the LDB the sole right to purchase beverage alcohol for resale within British Columbia and from suppliers and manufacturers outside the province, in accordance with the federal Importation of Intoxicating Liquors Act. Section 3 provides that:

…no person shall import… or cause to be imported… any intoxicating liquor… except such as has been purchased by or on behalf of… Her Majesty…

As the sole buyer and re-seller of liquor in the province’s mixed public-private model, the LDB is one of the largest purchasers of beverage alcohol in the world. Every year, the LDB buys alcohol from more than 1,000 Canadian and international suppliers and manufacturers, supplying product to hospitality and retail customers across the province.

Once the alcohol is imported to British Columbia it will be stored at the LDB warehouse or a bonded warehouse until it is distributed to bars, restaurants and retailers.

Role and Responsibility of Liquor Agent established by contract

In addition to the terms and conditions of licence, and the applicable statutes and regulations, the role of the liquor agent in British Columbia’s hospitality and retail sector is largely governed by contract, and a series of forms provided by the LDB.

Liquor agents have contracts with the manufacturers that they represent (who may be located in BC, other parts of Canada, or anywhere in the world), and also contracts with the LDB and others that set out the terms of how the products they represent will be imported, paid for, stored and distributed.

The following agreements and forms must be completed before a liquor agent can conduct business:

Liquor Warehouse Agreement

  • Contains the terms and conditions under which liquor is imported into BC and stored at an approved excise licensed warehouse (wine and spirits) or a custom bonded warehouse (beer) until the liquor is transferred to the LDB’s Distribution Centre or privately distributed.

Supplier Authorization Agreement

  • Identifies the agent as the sole distributor and purchaser of that brand of alcohol in BC (through the LDB).

Product Registration Form

  • Sets out product label information , allergens declaration, unit cost and packaging size etc.

Interested in becoming a liquor agent or importing liquor into British Columbia?  Need assistance navigating the licensing process, or incorporating your firm? Contact Dan Coles at Owen Bird for assistance obtaining an agent licence.

*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.

Wolf in the Fog caught in Minors as Agent Program Investigation

Recently the Liquor Control and Licensing Branch released its reasons in Re Wolf in the Fog EH16-096, confirming that even high-end restaurants will be targeted by British Columbia’s liquor inspectors conducting minors as agent program (MAP) investigations.

The Wolf in the Fog is a fine dining establishment located in the popular surf and tourism town of Tofino, British Columbia. In 2014 it was the recipient of the “best new restaurant in Canada” award and in 2015 it was ranked 38th in the country. In the words of its management, the establishment is not “a dive bar, diner or casual family restaurant.”

The Wolf in the Fog operates under a food primary licence.

On February 23, 2017 the Liquor Control and Licensing Branch’s delegate conducted a hearing into the allegation that on July 6, 2016 an employee of the Wolf served alcohol to a 16 year-old, who at the time was acting as an agent of the Branch as part of the Branch’s ongoing MAP inspection. Supplying liquor to a minor is a contravention of the Liquor Control and Licensing Act that under the old Act carried a minimum monetary penalty of $7,500.

At the hearing the representatives of the Wolf did not dispute that its employee served a minor. Rather, they submitted that the establishment had taken all necessary steps possible to prevent the contravention from occurring. In legal parlance this is known as a due diligence defence.

The Wolf outlined for the Branch the following steps it takes to prevent its staff from serving minors:

  • All new hires are required to have Serving-It-Right training
  • The employee manual contains information dealing with the need to identify minors
  • A whiteboard that contains the day’s food special contains a reminder of the date on which anyone being served alcohol must be born before
  • Management-led meetings held at the start of each shift confirm the importance of not serving minors
  • Shift managers supervise staff to ensure they ask patrons for identification

However, on cross-examination the Wolf’s representatives conceded that:

  • Management does not go through the employee manual with new employees, instead the new employees merely sign a form verifying their review of the same
  • Employees are in fact hired without Serving-It-Right; those without SIR act as hosts
  • There are no testing protocols or written policies with respect to testing staff on their knowledge about liquor law
  • No signage around the establishment warns against serving minors – as those signs would disrupt the fine dining aesthetic
  • The employee who served the minor was suspended rather than being fired

The Branch concluded that the Wolf’s training regime fell short of being adequate. The Branch highlighted the licensee’s concession that there were “no written policies regarding training standards or processes.” Overall the Branch found the licensee’s training regime to be largely ad hoc and therefore not duly diligent. The Branch’s delegate ordered that the Wolf pay a $7,500 penalty.

The Branch’s decision in Re the Wolf in the Fog is a reminder to all licensees that liquor inspectors can and do investigate licensed establishments of all stripes: from nightclubs to high-end restaurants in remote locations.

At the hearing a liquor inspector advised the Branch that the reason for the minors as agent program inspection was because at an earlier inspection conducted in April of that year the liquor inspector was concerned about the number of young people being served alcohol without being asked for identification. MAP inspections are usually conducted in response to complaints or perceived risk.

Licensed establishments that are consistently operated in accordance with the terms of licence and the Act are unlikely to be subject to significant attention from liquor inspectors. On the other hand, as evidence by the liquor inspector’s comments in Re Wolf in the Fog, if your establishment is perceived as being casual about its obligations it will invite greater scrutiny from liquor inspectors.

If your bar or restaurant is facing enforcement action by the Branch, or has recently received a notice of contravention, contact Dan Coles at Owen Bird.

*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.

2016 Compliance and Enforcement Inspection Statistics

Previously Alcohol & Advocacy reported on B.C’s Liquor Control and Licensing Branch compliance and enforcement statistics for January – October, 2016. The Compliance and Enforcement division has now made more statistics from 2016 available, including the “Top Ten Contraventions Pursued” which are as follows:

  1. Selling liquor to a minor
  2. Overcrowding beyond occupant load
  3. Contravening a term and condition
  4. Allowing liquor to be removed from establishment
  5. Operating contrary to primary purpose – food primary
  6. Permitting prohibited entertainment
  7. Employee consuming liquor while working
  8. Failing to promptly provide a record, thing or sample
  9. Selling or giving liquor to an intoxicated person
  10. No proof of prescribed server training.

In total the Branch conducted 11,950 inspections of licensed premises. 444 of the inspections involved the Minor as Agent program.

The list of most common contraventions pursued by the Branch is informative:

  • if other licensed establishments are making these mistakes, your staff and management may do the same;
  • it indicates where liquor inspectors are focusing their investigations; and
  • it indicates which contraventions of the Liquor Control and Licensing Act the Branch pursues (rather than dealing with informally).

The sale of liquor to minors unfortunately remains the most contravened section of the Act, and owners and operators of licensed establishments should make the ongoing education of their staff on this subject a top priority. Only the most rigorous and thorough training regimes will be successful if raised as a due diligence defence at a hearing before the Branch.

Other contraventions on the list such as overcrowding, allowing liquor to be removed from the establishment, and selling or giving liquor to an intoxicated person, relate to areas that traditionally fall into the domain of “security” at larger establishments. If your bar or club uses a security company or employs a doorman to maintain safe numbers and ensure intoxicated persons do not enter or remain into your establishment, are they provided with ongoing training on the Act and the terms and conditions of licence applicable to your establishment?

Alternatively, if you bar or restaurant does not have a dedicated doorman or security service, who is responsible for doing head counts or ensuring patrons do not leave with alcohol?

If you have questions about how the Liquor Control and Licensing Act applies to your establishment, or are facing enforcement action, contact Dan Coles at Owen Bird.

*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.

Commercial Host Liability in British Columbia

On March 8, 2017 Mr. Justice Kent of the Supreme Court of British Columbia released his reasons in Widdowson v. The Cambie Malone’s Corporation – British Columbia’s most recent decision on commercial host liability. The court found the Cambie Malone’s liable for over-serving a patron who later struck Mr. Widdowson with his truck, causing him severe injuries, including brain damage.

The court found the Cambie Malone’s 25% at fault for Mr. Widdowson’s injuries.

The Facts

In the afternoon of February 17, 2012 Bradley Rockwell, a sheet metal worker working on a project in downtown Vancouver, met three co-workers for drinks at the Cambie Bar & Grill. They were having “good bye” drinks for Mr. Sahanovitch who was leaving the construction company the following week to go to “sheet metal school”.

Although the evidence on exactly when the men arrived at the bar, how long they stayed, and how many drinks they consumed was not consistent between the witnesses who gave evidence at trial, the court found as a fact that:

  • Rockwell and his co-workers spent about two hours at the bar between 12:30 and 2:30 pm;
  • Rockwell consumed 5-6 drinks at the bar, comprised of a combination of beer and liquor; and
  • Rockwell was “significantly intoxicated by alcohol” by the time he left the establishment and his ability to drive safely was significantly impaired.

After leaving the Cambie Malone’s Mr. Rockwell got into his truck, along with the highly intoxicated Mr. Sahanovitch in the passenger seat, and drove down Hastings Street towards Mr. Rockwell’s home in Port Moody. They stopped at one point so that Mr. Sahanovitch could purchase a six-pack of beer and a “mickey of whiskey” which he drank along the way.

Upon arrival at Mr. Rockwell’s home the two men proceeded to drink some flavoured vodka that Mr. Rockwell had on hand. They left Mr. Rockwell’s home after a span of about 15 to 20 minutes so that Mr. Rockwell could drive Mr. Sahanovitch to the Coquitlam Centre Mall where his mother would meet him and take him home.

At approximately 5:00 pm (2.5 hours after leaving the Cambie Bar & Grill) at a blind turn on Guildford Way, Mr. Rockwell “gunned” his truck to get ahead of an approaching vehicle, causing his truck to fishtail in the then pouring rain. Mr. Rockwell lost control of the vehicle, mounted the sidewalk, and struck Mr. Widdowson.

The RCMP arrested Mr. Rockwell at the scene. The arresting officer described Mr. Rockwell as rambling and profane with slurred speech; he was literally falling down drunk. Although Mr. Rockwell’s blood alcohol content (BAC) was not tested at the roadside, the court accepted as a fact based on later bloodwork that at the time of the accident Mr. Rockwell’s BAC was .334, more than four times the legal limit.

Mr. Rockwell has no memory of the accident.

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Trouble is brewing following Wal-Mart’s entrance to the craft beer market

American craft beer class action warfare remains alive and well in 2017 with Wal-Mart entering the cross-hairs earlier this month. In February Mr. Matthew Adam of Hamilton County, Ohio commenced a class action lawsuit against Wal-Mart on behalf of all purchasers of “craft” beer from Wal-Mart Stores.

In brief, Mr. Adam alleges that he was tricked into purchasing beer that was manufactured and marketed by Wal-Mart as “craft” beer, when it fact nothing about Wal-Mart’s beer was “small, independent and traditional” (*beer drinking community lets out a collective gasp*). It would appear as though no one drew to Mr. Adam’s attention Mr. Evan Parent’s unsuccessful attempt to sue the Blue Moon Brewing company over substantially similar allegations, or Alcohol & Advocacy’s commentary on the same.

In his initial filing with the Hamilton County court of common pleas, Mr. Adam says that through a “fraudulent, unlawful, deceptive and unfair course of conduct” Wal-Mart sold its Cat’s Away IPA, After Party Pale Ale, Round Midnight Belgian White and Red Flag Amber as “craft” beer to residents of Ohio and 44 other states since 2016.

Mr. Adam says that consumers are willing to pay more for high quality small batch beers, and goes on to cite dictionary and Brewers Association definitions of “craft beer”.

To produce its line of beers Wal-Mart collaborates with Trouble Brewing – a brewery that “does not really exist”. Instead, says Mr. Adam, Trouble Brewing is merely a combination of a company called WX Brands that “develops exclusive brands of wine, beer and spirits for retailers around the world” and Genesee Brewing – one of the largest continually operating breweries in the United States. Mr. Adam says that Wal-Mart’s “craft” beer is a “wholesale fiction” designed to “deceive consumers into purchasing the [beer] at a higher, inflated price.”

Mr. Adam alleges that Wal-Mart stocks its “craft” beer next to other (presumably legitimate) craft beers, and has designed its label to convey the look and feel of genuine craft beer. Finally Mr. Adam says that consumers are particularly vulnerable to these kind of “false and deceptive labelling and marketing practices.” Mr. Adam believes that most consumers do not have enough knowledge to tell the difference between fake craft beer and the real deal. Without judicial intervention, Mr. Adam believes Wal-Mart’s scheme to defraud and victimize consumers will remain ongoing.

Mr. Adam’s lawsuit is tough to stomach for a variety of reasons, not least of which is the glaring omission of an allegation that Wal-Mart actually describes its Trouble Brewing beer as “craft”, or that it claims the beer is made in small batches by traditional methods. Instead Mr. Adam in his statement of claim appears to equate fancy labels, contract brewing arrangements, and the location of beer displays with the very specific representation that the beer at issue is made in accordance with the Brewers Association definition of “craft beer”. Mr. Parent, in his failed class action proceeding against Blue Moon Brewing took a similar tack, and each of those basis for a claim were deconstructed and dismissed by Judge Curiel. Alcohol & Advocacy fully expects this merit-less claim to be dismissed at an early stage for similar reasons.

Canadian manufacturers, importers and distributors should take note of this, and similar litigation. Are these lawsuits entirely frivolous? Or are they a reminder that consumers continue to place a considerable premium on how beer is made, and if they feel they are being deceived will act accordingly?

If your company requires advice on Canada’s labelling laws, or British Columbia’s liquor marketing regulations contact Dan Coles at Owen Bird.

*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.

 

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