Trouble brewing for Wal-Mart with lawsuit claiming there’s nothing ‘craft’ about its craft beer

A lawsuit against Wal-Mart is claiming that its four craft beer brands do not qualify as "craft" according to a three-part definition by the Brewers' Association. ©iStock/Wolterk

Wal-Mart is facing a lawsuit alleging that its craft beer does not fit the definition of “craft” as outlined by the Brewers Association, and that consumers are unfairly paying a premium price.

The plaintiff, Matthew Adam, filed a lawsuit against the retail giant in an Ohio common appeals court on Feb. 10, 2017, claiming that Walmart’s craft beer deceives customers into paying inflated prices.

"Defendant's craft beer has never been a craft beer, nor has it been produced by a craft brewery," the lawsuit reads.

"Rather, it is a wholesale fiction created by the defendant that was designed to deceive consumers into purchasing the craft beer at a higher, inflated price."

Wal-Mart director of national media relations, Ragan Dickens, told BeverageDaily: “We hold our suppliers to high standards and are committed to providing our customers the quality products they expect. While we have not yet been served with the complaint, we take this matter seriously and intend to defend ourselves against the allegations.” 

Trouble Brewing doesn’t exist

Wal-Mart first launched its line of craft beer in 2016 and is now sold in over 3,000 retail locations across 45 states. The beer comes in four varieties including: Cat’s Away IPA, After Party Pale Ale, Round Midnight Belgian White, and Red Flag Amber. The superstore said the beer is made in collaboration with Trouble Brewing.

“The trouble is, ‘Trouble Brewing’ doesn’t really exist,” the plaintiff stated. The plaintiff discovered through filings with the Alcohol and Tobacco Tax and Trade Bureau (TTB) that Wal-Mart listed Winery Exchange Inc. (WX Brands) as the producer of its craft beer, and the brewery address listed in the document belongs to Genesee Brewing in Rochester, New York, not Trouble Brewing.

In the court document, Adam says that Genesee Brewing does not fit the basic criteria, defined by the Brewers Association, to qualify as a craft brewery including: “(a) produce less than six million barrels of beer annually; (b) be less than 25% owned or controlled by a non-craft brewer; and (c) make beer using only traditional or innovative brewing ingredients.”

The court document alleges that Genesee Brewing produces well over the amount outlined by the Brewers Association.

Craft price tag for mass-produced beer

Adam stated that Walmart has been deceptively and purposely charging a higher price for its falsified craft beer products because consumers are willing to pay a premium price for craft beer.

"Consumers generally believe that 'craft beer' products are of higher quality than mass produced counterparts," the suit states. "Due to the Defendant's scheme to defraud the market, members of the general public were fraudulently induced to purchase craft beer at inflated prices."

A 12-pack of the craft beer averages $14, roughly $2 to $3 more than the average price of a 12-pack of mass-produced beer.

Adam has filed for an injunction to stop Wal-Mart from labeling and marketing its beer as craft and is seeking damages against the company. A trial date is schedule for May 2, 2017. 

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