June 9, 2015

MillerCoors Facing Hangover After Alleged "Crafty" Marketing Scheme

Seller Beware: Consumer Protection Insights for Industry


In yet another case of alcohol companies facing false advertising suits, a class action suit was filed last month by a consumer against beer maker MillerCoors in the US District Court in the Southern District of California. The suit alleges that MillerCoors deceptively markets its Blue Moon beer as a "craft beer." Blue Moon, a Belgian-style witbier (wheat beer) brewed by Blue Moon Brewing Company, a subsidiary of MillerCoors, is well-known for its distinctive blue label and traditional orange slice garnish. In this suit, the plaintiff argues that MillerCoors misleads customers to believe that Blue Moon is a "craft beer," not a "mass-produced beer." This deception, the plaintiff claims, caused him to pay more for Blue Moon because he believed that the beer was of a higher quality. The plaintiff has requested monetary and injunctive relief for violations of California's consumer protection and false advertising laws, Cal. Civ. Code §§ 1770(a) and Cal. Bus. & Prof. Code §§ 17500, 17200.

The plaintiff argues that Blue Moon is not a "craft beer," as defined under the Brewers Association guidelines. The Brewers Association is an organization dedicated to protecting "small and independent American brewers." The organization has been active in the media for a number of years, providing comments for articles focusing on "big beer" companies' participation in the "craft beer movement" and issuing statements to the public that Blue Moon and Anheuser-Busch brewed Shock Top beer did not fit the Association's definition of "craft beer." For its advocacy purposes, the Brewers Association defines craft beer as being made in breweries that:

  1. Produce less than 6 million barrels annually,
  2. Are less than 25% owned or controlled by a non-craft brewer, and
  3. Make beer using only "traditional or innovative brewing ingredients."

Even the Brewers Association, however, is quick to note that the Association's definition of
"craft beer" has no legal force, noting in a 2013 article that: "[t]he Brewers Association does not define what craft beer is. That is up to the individual beer lover to discern."

Despite this disclaimer, the current lawsuit appears to be the first time that a lawsuit is being based, at least in part, on the Association's definition of "craft beer." As noted above, the plaintiff argues that Blue Moon is not a "craft beer" under the Brewer Association's definition (or as "generally understood by beer consumers."). In response to the plaintiff's argument, MillerCoors highlights the fact that the Brewers' Association definition of "craft beer" has no legal force, noting in part, that "[t]here are countless definitions of 'craft,' none of which are legal definitions."

In this suit, however, the plaintiff claims that MillerCoors deceptively markets Blue Moon as craft beer by omitting the "MillerCoors" name from the Blue Moon label and website. Plaintiff argues that this omission is tantamount to "fraudulently claiming that Blue Moon is brewed by Blue Moon Brewing Company." The plaintiff also takes issue with the Blue Moon use of the phrase "Artfully Crafted." MillerCoors responded that the company is "tremendously proud of Blue Moon and has always embraced our ownership and support of this wonderful brand."

The next step for this case is probably a motion to dismiss, in which MillerCoors is likely to reiterate its public statements, point out that "craft" need not have any relation to the size or scope of the brewery, and argue that it has complied with all applicable regulations. It will be interesting to see how the court receives the plaintiff's claims -- while most of the alcohol advertising cases recently have relied on statements made on the bottles' labels or in advertising (here, the "Artfully Crafted" phrase) -- the plaintiff's complaint in this case seems more concerned with information omitted from the label -- namely, the "MillerCoors" brand. In the unlikely event the case continues, class certification, as we discussed in the Skinnygirl Margarita case, will be a challenging hurdle for the plaintiff to overcome.

Despite the challenges faced by the plaintiff, this suit is a good reminder for alcohol manufacturers to keep their wits about them while marketing their products -- this much legal attention on alcohol advertising suggests that similar suits are likely to be filed more than once in a blue moon. Likewise, beer enthusiasts, if they are concerned about whether their drink meets their definition of "craft," should simply do some stout research before they order their next porter.

© Arnold & Porter Kaye Scholer LLP 2015 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

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