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Beer Fiction: Walmart Sued Over Craft Beer

By George Khoury, Esq. on February 28, 2017 | Last updated on March 21, 2019

Beer lovers sure do love craft beers. In addition to being known for quality, the potent potables often have eye-catching packages and witty names. In an effort to capture some of this rapidly growing niche market, Walmart partnered with a Costa Rican brewery to manufacturer the following allegedly American craft beers: "After Party Pale Ale," "Cat's Away IPA," "Red Flag Amber," and "Round Midnight Belgian White."

When one craft beer loving Walmart consumer discovered he'd been duped into buying faux-American beer that was labeled and designed to look similar to other American craft beers, he filed a class action lawsuit. The lawsuit claims that Walmart intentionally deceived consumers by labeling the products as American craft beers made in Rochester, New York by the Trouble Brewery, when none of these statements on the label were true. The lawsuit seeks refunds for consumers as well as punitive damages against Walmart for deceiving customers.

What Is "Craft" Beer Anyway?

Typically, for a beer to be considered a craft beer, it must be made by a small, independent, commercial brewer that is focused on quality and traditional brewing methods. However, unlike the term "Organic," which has been legally defined, there is no legislated definition for "craft" beer. Currently, the Brewer's Association's definition is what the lawsuit is based upon and what is considered as the industry standard definition of what constitutes a craft beer. But as the craft beer industry is currently growing at a rapid pace, what is considered craft beer is also undergoing change. Under the current BA's standard, a craft beer maker must:

  • Be at least 75% independently owned
  • Produce less than 6 million barrels per year, and
  • Use traditional fermentation methods

However, these rather specific industry standards, when applied to the brewery that Walmart partnered with, could potentially be met. As a preliminary matter, under the current standards for craft brewers, it would be technically possible for one craft brewer to supply 3,000 Walmart stores, as 6 million barrels of beer roughly equates to 330 million 6-packs, which means that each of the 3,000 stores would get approximately 110,000 6-packs per year. If craft beer seems a little less special after reading that, it's completely understandable.

More concerning for Walmart are going to be the claims of deceptive advertising and marketing, as the lawsuit alleges consumers were led to believe the beer was a product of the USA, when it was actually made abroad.

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