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Red Stripe: Another One Bites…

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dudeThis morning I awakened to find yet another lawsuit about sketchy alcohol beverage labels. It sounds like Red Stripe is being sued for being a fake Jamaican, like the guy depicted off to the right. I am going to see if my colleagues John and Frank are around to liveblog this with me, this Friday morning.

John:  is the above label roughly representative?

Not really. This one is more representative because it shows Red Stripe made in Pennsylvania, instead of the above label showing a beer made in Great Britain. Most of the recent label approvals show made in the U.S. (not Jamaica or Great Britain).

bottleMy initial view of the label is, this lawsuit may be one of the worst yet. The label seems to do an excellent job of saying, front, center, not small, not low contrast, that the product is JAMAICAN STYLE (not necessarily “Jamaican”). In point of fact, JAMAICAN STYLE tends to imply it’s not Jamaican at all, at least in Battle Martin-land (he approved this label for TTB and famously maintained that, e.g., a “Spokane Style Beer” could not be made in Spokane). The label also mentions Product of Great Britain (or BREWED & BOTTLED BY RED STRIPE BEER COMPANY, LATROBE, PA), to fairly well disabuse any false notions.

webThe web page (as of 9:50 am ET today, at left) does not look confusing, either (at least the first page).

Mike (former bartender to the nearly rich, famous and cool):  as of last week, where did/do you think Red Stripe is made (or, what Jamaican beers do you like)?

When I worked at a college bar in Fairfax, Red Stripe was very popular. All day, they would come in and ask for “the Jamaican one.” We sold a ton of Red Stripe.

The class action lawsuit against Diageo, filed in federal court in San Diego, preposterously claims:

This is a class action on behalf of consumers of Red Stripe® beer who have been deceived that Red Stripe, a historically Jamaican beer, is manufactured in and imported from Jamaica to the United States. Defendants have committed unfair and deceptive practices and have been unjustly enriched by marketing and selling beer in a way that misleads consumers into believing that Red Stripe is still imported from Jamaica. In particular, Red Stripe’s packaging claims that it is a “Jamaican Style Lager,” that contains “The Taste of Jamaica,” and the packaging contains the distinctive logo of Desnoes and Geddes Limited (“D&G”), a Jamaican brewery. In addition, on Red Stripe bottles, Defendants write that “For Over 80 years… Red Stripe® has embodied the spirit, rhythm and pulse of Jamaica and its people.” Further, Red Stripe is sold at substantially higher prices than those of domestic beer, despite the fact that the beer is brewed in the United States with domestic ingredients.

I wonder if anyone, or anyone other than the guy at upper right, is truly deceived or truly deceiving anyone.

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Gluten-Free Labeling

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Sorry to disappoint anyone, but that’s not Attorney John Messinger over to the left. But it is John, over to the right, covering Gluten-Free Labeling for Beer, Wine and Spirits, in a recent issue of Beverage Master Magazine.

The full article is here. The first few paragraphs are here:

Gluten-free foods and beverages were one of the popular trends of 2014. In the past year, over 70 new alcohol beverage label approvals mentioned “gluten-free,” which is more than the combined total of gluten-free labels in 2012 and 2013. Breweries, wineries and distilleries who wish to cater to the gluten-free diet market and provide those with celiac disease additional choices can do so, but there are a fair amount of rules and red tape to wade through. This article breaks down the federal requirements for gluten-free labeling.

Background

The Alcohol and Tobacco Tax and Trade Bureau (“TTB”) regulates the labeling and advertising for the majority alcohol beverages. In May 2012, TTB issued an interim policy on gluten content statements in the labeling and advertising of beer, wine and distilled spirits, which allowed some products to make gluten-free claims (TTB Ruling 2012-2). This policy was issued pending guidance or rulemaking by the Food and Drug Administration (“FDA”) on the subject of gluten-free claims. In August 2013, FDA issued a final rule to establish a regulatory definition of gluten-free (21 CFR 101.91). TTB revised their policy on gluten-free labeling and advertising in February 2014 to be consistent with (but not identical to) FDA’s final rule (TTB Ruling 2014-2).

What Qualifies as Gluten-Free?

TTB’s current policy does not allow alcohol beverage products to be labeled and advertised as gluten-free if they are made from or contain:

  1. “Gluten-containing grains,” meaning wheat, rye, barley or crossbred hybrids (e.g. triticale);
  2. Ingredients made from gluten-containing grains, if those ingredients have not been processed to reduce the gluten content of the ingredient to a level below 20 parts per million (ppm).

In general, wines fermented from fruit and certain distilled spirits that are produced from specific non-grain commodities (e.g. rum, tequila, vodka distilled from cherries) can be labeled or advertised as gluten-free without substantial difficulty.

John is a beer and beverage lawyer in the Washington, DC area. Read on, here.

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Webinar: The Class Action Lawsuits

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A few weeks ago I had the great honor of traveling to Chicago to co-present a webinar with Simon Fleischmann and Tom Cunningham. Tom and Simon are expert defense litigators at the Locke Lord law firm, and they have deep experience representing food and beverage companies in class action lawsuits around the country. I say it’s an honor because I have learned a huge amount about class action litigation over the past year, from Tom and Simon. For any company in a jam, I don’t think they could do better than to have these fine lawyers on their side.

The webinar is entitled “Spirits Industry Under Fire:  The Threat of Class Action Litigation.” More than 125 lawyers and beverage executives tuned in for the live event. In addition, Locke Lord recorded the webinar. The audio file is here. It includes about 20 minutes from Tom (what the cases are about and why you should be concerned), 20 minutes from Robert (the TTB aspects, Tito case, and why federal approval is not a silver bullet), then 20 minutes from Simon (the first Maker’s Mark decision, and how to lessen the risks). This is followed by about 20 minutes of questions from the live attendees. You can also view the PowerPoint at the link, and download a booklet on the same topics. Overall this is an excellent way to bring yourself up to speed on the wave of litigation that has smashed up against the spirits and beer industries during the past year.

You will need to fill in a few fields at the Locke Lord website to access the webinar. The audio is high quality during most of webinar but it has some very rough spots, especially during the first 1/3 of my presentation. I do plead guilty to letting my phone buzz, but I am not sure what else could have caused the problem. The room was quiet and the microphones were good, despite how it sounds (in some moments it sounds literally like we are under fire or getting hit with a wave of litigation). It is easy to hit fast forward, rewind, and to jump around by sections. If you listen closely you can get a better idea who is likely to win and lose in these high stakes battles, and learn how to stay away from the problems that have hit Beck’s, Blue Moon, Tito’s, Beam, Bulleit, Maker’s Mark and a host of others. With scores of class action suits filed in the past year, just in the spirits area, nobody should be surprised or unprepared when the next suits hit.

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Cocktail Caviar: Pearl Size Can Make All the Difference

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Here is an innovative new spirits product called Cocktail Caviar. It is “burst-able pearls of naturally flavored spirits.” You can toss them in some wine, or freeze them and add them to other drinks. The product is so new that there is not much about this product on the web so far.

If I understand correctly, these chickpea sized “pearls” are a giantized version of the tiny booze droplets that make up Palcohol. Here, the alcohol is encapsulated in a layer of kelp and so it not quite a liquid and not quite a solid. Maybe there is shock fatigue after the Palcohol surprise, or the size of the pearls makes an enormous difference, or it’s the upscale marketing — but it does not seem like this product is bound to raise hackles the way the powderized product has. Steven Hollenkamp, the man behind this product, explained that part of the appeal of the brand name is that “caviar” is not at all likely to appeal to minors.

I happened to meet Steven this week and he explained:

We worked diligently with TTB getting Cocktail Caviar approved. This included 240 emails, dozens of phone calls and several in-person meetings with TTB administrators, one of which was a lengthy sit down meeting with several high-ups at TTB Headquarters in DC. They were on top of it and met me half way. As a novel product, we felt being an open-book in terms of information and documents, as well as with the long term Cocktail Caviar vision, was the best way to cultivate a healthy long term relationship with TTB. I mean that, and while that may seem like a simple idea, you’d be surprised how many brands use a more guarded approach, trying to snake through the rules in a way that can only irritate TTB formula and COLA specialists.

TTB approved seven flavors of this product last month, and one of the approvals is here.

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A-B Finds Safe Harbor

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Earlier this week a federal court decided that TTB’s approval for Bud Light Lime Lime-A-Rita provides a “safe harbor” to protect certain label elements. Largely on account of this safe harbor, the court dismissed the class action lawsuit. The plaintiff had contended that the reference to “light” on the Rita products was misleading because it leaves an impression that the flavored malt beverages are low in calories and carbohydrates.

The Cruz v. A-B decision is in stark contrast with the Tito’s decision of three months ago. In the vodka dispute, Tito tried to locate the same safe harbor, but got pushed back into the middle of a heavy storm.

8470.664025.BLR_8can_8pThere are many class action lawsuits filed against alcohol beverage companies during the past year. They include Templeton, Angel’s Envy, Tincup, Whistlepig, Jim Beam, Maker’s Mark, Bulleit and Breckenridge. In most if not all, the defendant brands have argued that the TTB approval should create a safe harbor. But so far, until the Lime-A-Rita case, no judge has agreed that the COLA should protect the brand.

The Lime-A-Rita case may be an outlier because, at least according to Judge Birotte, the plaintiffs did a horrendous job with the pleadings. Secondly, TTB has a fairly specific policy regarding “light” labeling, and it appears that A-B complied with it. In most of the other suits so far, there is no specific TTB policy relating to the labeling at issue (as in the “handmade” cases) — or there is a specific policy but it appears the brand did not comply with it (as in the state of distillation cases).

The Lime-A-Rita court was not even a little impressed with plaintiffs argument that the Rita products should be regulated by FDA rather than TTB. The court explained that the Brown-Forman case resolved this jurisdictional issue way back in 1976 and “there is nothing in the 40 years of subsequent case law that persuades the Court to disagree with the Brown-Forman holding.”

Taking a close look at the label approvals, the court said:

Instead [of TTB’s “light ruling,” Ruling 2004-1], it is the COLAs that are considered the rulemaking authority here which trigger the safe harbor provision. Plaintiffs neglect to address the administrative force of the COLAs. They apparently presume that A-B’s safe harbor arguments solely rest on the [Ruling] but it is the COLAs that have the force of law here. … Plaintiffs do not, and cannot, dispute this ‘relatively formal administrative procedure’ and the effect of law COLAs embody. … [Because] Plaintiffs’ causes of action conflict with the TTB’s approval of the Rita Products’ labels, the safe harbor doctrine insulates A-B from liability.

I have my doubts about whether the label approval process is a “relatively formal administrative procedure.” Relative to a kegger in the frat basement, perhaps. On the other hand, it is not even as formal as a Las Vegas wedding.

In closing, and handing A-B a big victory, the judge went even further, writing:  “Because Plaintiffs’ complaint is rife with deficiencies, the Court finds that Plaintiffs’ causes of action under UCL, FAL, and CLRA fail as a matter of law.”

Note:  extra credit for anyone who can identify the glorious safe harbor depicted above.

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