Lawsuit accuses MillerCoors of falsely advertising Blue Moon as a “Craft” beer

Originally published by Katharyn Grant (US).

A proposed class action lawsuit filed in San Diego County (California) Superior Court accuses MillerCoors LLC of engaging in deceptive and misleading advertising and violating California’s Consumer Legal Remedies Act by describing its Blue Moon beer as an “Artfully Crafted” product of the “Blue Moon Brewing Company.”

According to the plaintiff, MillerCoors’ advertising “misleads consumers to believe that Blue Moon is an independently brewed, hand-crafted beer,” when it is a “mass produced beer made by MillerCoors.” See Complaint (April 24, 2015).

Pint-sized history of hand-crafted beers

From the end of beer Prohibition in 1933 until the early 1980’s, most beer consumed in the United States was “American lager” – a pale-yellow colored, mild-flavored and lightly-hopped beverage produced by one of a small number of large breweries. However, since 1979, the number of breweries in the United States has skyrocketed from fewer than 100 to more than 3000, mainly due to an increase in the number of small, independently owned breweries.

These newer, smaller breweries produce a wide range of complex beer styles. Consumers are often willing to pay more for beers described as “hand-crafted” due in large part to the apparent perception that such products are fresher because they are made locally and in small batches.

Blue Moon’s advertising

Blue Moon Belgian White is a Belgian-style wheat beer featuring a slightly sweet, orange flavor. Developed and introduced in 1995 at a small brewery at Denver’s Coors Field, Blue Moon’s annual sales currently exceed more than two million barrels. It is labeled as a product of the “Blue Moon Brewing Company,” a part of Tenth and Blake Beer Company, the craft and import division of MillerCoors.

According to the Complaint, the plaintiff is a beer aficionado and home brewer who purportedly purchased Blue Moon believing it was a “craft beer,” as the term is used by “beer consumers and the Brewers Association.” The Brewers Association is a trade group based in Boulder, Colorado, formed “to promote and protect American craft brewers, their beers and the community of brewing enthusiasts.”

Per the Brewers Association, to qualify as a “craft brewer”, a brewery must be “small,” i.e., making no more than 6 million barrels of beer per year; “independent,” meaning that no more than 25 percent of the company is owned by a non-craft beverage industry member; and it must make beer that is “traditional,” i.e., relies on malted barley and not “filler” ingredients, such as corn and rice.

The Complaint notes that “the Blue Moon beer purchased from retail stores by Plaintiff and other members of the Class is brewed by MillerCoors at a MillerCoors brewing facility.” The Plaintiff does not claim that he was disappointed by the taste, quality, or freshness of MillerCoor’s product. Instead, he alleges that because MillerCoors “clearly does not constitute a craft brewer,” “Blue Moon does not constitute a craft beer.”

Becks and Kirin brands class actions

The Blue Moon lawsuit follows two class action lawsuits brought in Florida against Anheuser-Busch Cos. LLC, accusing the company of using unfair and deceptive practices to allegedly mislead U.S. consumers into thinking its Becks and Kirin brands are “imported beers” brewed in Germany and Japan respectively, when in fact both beers are brewed in the United States using domestic ingredients.

Anheuser-Busch settled the suit concerning Kirin in January of this year, agreeing to pay consumers who bought Kirin from Oct. 25, 2009, through Dec. 17, 2014, 50 cents per six-pack of 12-ounce bottles, $1 per 12-pack of 12-ounce bottles, or 10 cents for each individual bottle or can, and to more prominently include the phrase: “Brewed under Kirin’s strict supervision by Anheuser-Busch in Los Angeles, CA and Williamsburg, VA” on Kirin beer bottles.

Commentary

These suits may have implications for the marketing of other beer brands, including some recently acquired by the large beer conglomerates.

In an effort to combat declining market share and to tap into the growing popularity of specialty beers, both MillerCoors and Anheuser-Busch have purchased stakes in smaller established breweries (e.g., the Redhook Ale Brewery and Elysian Brewing Co. in Seattle and the Kona Brewing Company on Hawaii’s Big lsland) and acquired others in their entirety (e.g., the Jacob Leinenkugel Brewing Company in Chippewa Falls, Wisconsin and the Goose Island Brewery in Chicago). For small brewers that have become successful enough to build up a national demand, becoming an affiliate or subsidiary of a larger beer company can help take the pressure off of overwhelmed brewing facilities, provide access to a larger distributor network, and aid in branding and marketing efforts. Although these beers may no longer meet the Brewer’s Association “craft beer” definition by virtue of their ownership, almost all are typically found in the “craft” beer section of retail stores.

The suit could also have repercussions for small brewers that use the services of “contract brewers” – usually larger but underutilized commercial breweries that may be located far away from the smaller company’s headquarters. A well-known example of a contract-brewed “craft” beer is the Boston Beer Company’s Sam Adams brand of beers, which were initially produced under contract by the Pittsburgh Brewing Company (best known for their Iron City brand of beers), and later by Stroh breweries, Portland’s Blitz-Weinhard brewery, Cincinnati’s Hudepohl-Schoenling brewery (purchased by the Boston Beer Company in early 1997), and SABMiller, a corporate predecessor of MillerCoors. Other companies that use contract brewers include Magic Hat (based in South Burlington, Vermont), Portland Brewing (based in Portland, Oregon), Narragansett (based in Providence, Rhode Island) and Pyramid Breweries (based in Seattle, Washington). All of these companies brew and/or package at least some of their beer products at the North American Breweries’ Genessee brew house located in Rochester, New York.

Sources:

Parent v. MillerCoors LLC, Case No. 37-2015-00013913-CU-BT-CTL (Super. Ct. Cal, San Diego County, California)

Marty v. Anheuser-Busch Companies, LLC, Case No. 1:13-cv-23656 (S.D. Fla.)

Gustavo E. Oliva et al. v. Anheuser-Busch Companies, LLC, Case No. 13-033620 CA 01 (11th Judicial Circuit, Miami Dade County, Florida)

Wilson, D., Big Beer dresses up in craft brewers’ clothing, Fortune (Nov. 15, 2012)

Brewers Association, Press Release (December 13, 2012)

 

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