So what a brewery says on labels and packaging is important. And consumer protection laws (including false advertising laws) are important. Add these two concepts up, and it appears to be class action heaven.  Brewers can avoid this nasty equation by being as up front as possible on both labels and packaging, especially about where a particular beer comes from.

One Northern District of California lawsuit involves Kona Brewing Company (Broomfiled v. Craft Brew Alliance).  The class action complaint alleges misleading or false labeling and advertising.  The plaintiffs allege that they were duped into purchasing Kona beer at a higher price because of Kona’s advertising schemes that play on Hawaiiana and specifically contain a map of the Big Island with a star that identifies Kona’s headquarters and an invitation to visit the brewery.  This, despite all Kona beer sold in the continental United States was actually brewed in the continental United States (the beer labels themselves state this fact).  Kona filed a motion to dismiss and claimed that the packaging was nothing more than non-actionable puffery.  But in late September, the Northern District denied the motion (granting the motion as to some causes of action) and allowed it to proceed, primarily on the grounds that the reasonable consumer test is best left for a jury to decide and that the map identifying Kona’s location and its invitation to visit the brewery could allow consumers to believe the beer was actually brewed in Hawaii.  So the case will go on, dollar signs in plaintiffs’ counsels’ eyes and all.  The class certification process alone can be horribly expensive for both sides.  Settlement anyone?

Asahi Beer U.S.A. finds itself in a remarkably similar predicament. Facing a class action complaint that alleges violations of California’s CLRA, Unfair Competition, and False Advertising, Asahi moved to dismiss.  The complaint alleged that consumers were deceived into overpaying for Asahi beer because they thought the beer was made in Japan.  It wasn’t.  In fact, it was brewed in Canada.  Interestingly, like Kona, each label copped to the fact that it wasn’t brewed in Japan.  In October, the court denied the motion in its entirety on several grounds.  Perhaps most germane, the court held that whether the packaging containing Japanese characters and the name Asahi (meaning “morning sun” in Japanese) was misleading to a reasonable consumer could not be decided as a matter of law.  Starting to see a pattern?  There are more of these cases lurking out there.

This raises two interesting things in my mind. First, there is a vocal group of craft beer pundits that loudly proclaim nothing matters besides what is in the glass.  I respect the position.  But I don’t believe it to be true.  Conversely, consumers do care about things like who made the beer and where it came from.  And if consumer concerns aren’t enough, than maybe false advertising lawsuits are.  Second, and most interesting to me, I have yet to see a lawsuit or an allegation that a truly independent brewer has misrepresented anything on a label or packaging.  They don’t have to.  So while big producers keep trying hard to assert their localness, the clothes simply don’t fit.  Of course, if where a beer is made and by whom is not important, big producers would not need to resort to potentially misleading advertising to gain an edge.  Brewers just need to be forthright in their marketing and packaging.  Honesty is the best (and most cost-effective) policy.

Let me know what you think. Cheers.

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