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Walmart sued for allegedly selling fake craft beer.
Last June, Walmart, the world’s largest retailer, announced that it was entering the craft beer game. These beers were marked as craft-style beers with names like After Party Pale Ale and Red Flag Amber. The beers were sold by Walmart and allegedly brewed by Trouble Brewery out of Rochester, New York. Walmart’s Senior Vice President of alcoholic beverages, Al Dominguez, claimed that this was part of Walmart’s strategy to “bring craft beer to the masses.” But a new lawsuit filed in Ohio claims that Walmart is pulling a fast one on its consumers.
The class action complaint alleges that no American brewery with the name “Trouble Brewing” exists and that the beer is actually produced by Genesee Brewing, a company owned by North American Breweries, a subsidiary of Costa Rica-based Florida Ice and Farm. Not exactly what a beer consumer would consider “craft beer”. The complaint takes aim at Walmart for charging higher prices for a beer that that simply is not what It purports to be.
What can be considered craft beer?
Further, the lawsuit claims that the beer being sold is not actually craft beer. According to the Brewers Association, a national trade group for small brewers, craft beer is defined as being small (under six million barrels per year), independent (less than twenty-five percent owned or controlled by a non-craft brewer) and traditional.
How the lawsuit against Walmart will turn out is difficult to predict. There have been several similar lawsuits filed against breweries and distilleries over the last few decades. For example, recently a judge dismissed a case against Blue Moon, which is owned by Coors, for marketing itself as a craft beer produced by the Blue Moon Company. In that case, the judge found that a “reasonable consumer” was unlikely to have been deceived by Blue Moon’s packaging, marketing, or website. A similar case was also dismissed against Tito’s Handmade Vodka. If those cases are any indicator, the claims against Walmart will be an uphill battle. However, there are some significant differences here and it seems clear that Walmart, by “creating” a fake brewery, has taken affirmative steps to mislead consumers.