Wal-Mart Sued Over ‘Craft’ Labeling On Beer Collaboration

Wal-Mart Sued Over ‘Craft’ Labeling On Beer Collaboration

Source: Law360

By Kat Greene

February 14, 2017

Wal-Mart Stores Inc. has been accused of marketing and pricing a mass-produced beer as though it were a small-batch craft product, according to a proposed class action in Ohio that targets the retail giant’s collaboration with a supposedly small supplier that isn’t really small at all.

Ohio beer shopper Matthew Adam said he bought a 12-pack of beer that was packaged to look like, and priced to sell like, the beer from other small beer makers. The beer was from a line Wal-Mart is selling in a collaboration with Trouble Brewing, a company that purports to fit the “craft beer” name.

But Trouble Brewing isn’t small at all, Adam said in the proposed class action filed Feb. 10. Rather, it’s a unit of a much larger conglomerate that mass-produces beers, meaning it shouldn’t be sold for a premium craft price near the other premium craft brews, he said.

“He suffered an ‘injury in fact’ by paying for something he believed was genuinely ‘craft beer,’ when it was not,” according to the complaint. “Essentially, the craft beer is not worth the purchase price paid.”

The suit accuses Wal-Mart of fraud and violating the Ohio Consumer Sales Practices Act, among other claims.

Adam said that when he bought the Trouble Brewing variety pack, he’d assumed he was paying a premium because the beer was craft. To be called craft, according to the Brewers Association, a brewery must make fewer than 6 million barrels annually and be less than 25 percent owned by a mass producer.

Wal-Mart has been selling four different styles of its own line of beer since last year as part of a collaboration with Trouble Brewing, according to the suit. Trouble Brewing, Adam said, doesn’t really exist. Rather, its official name when it applied for a brewing license was Winery Exchange Inc., which has since changed to WX Brands.

That company’s brewery address isn’t for WX Brands, but rather, for Genesee Brewing Co., a mass producer in Rochester, New York, according to the suit. Genesee is in turn owned by an even larger company in Costa Rica, Adam said.

He seeks to represent a class of consumers who paid the premium price of craft beer for what ultimately is just mass-produced beer, according to the complaint.

Wal-Mart said in a statement that the company hasn’t yet been served with the complaint, but that it intends to defend itself against the allegations.

“We hold our suppliers to high standards and are committed to providing our customers the quality products they expect,” the company said.

The plaintiffs are represented by Brian T. Giles and Bryce Lenox of Giles Lenox.

Counsel information for Wal-Mart couldn’t be immediately determined.

The case is Matthew Adam v. Wal-Mart Stores Inc., case number A 1700827, in the Court of Common Pleas, Hamilton County, Ohio.