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.