Earlier this year, two plaintiffs launched a putative class action against Portland-based Craft Brew Alliance, the fifth largest brewing company in the U.S. and parent company of Kona Brewing Co. Craft Brew acquired Kona in 2010, emblazoning its bottles and cans with images and text that conjure Hawaii’s scenery and lifestyle. There’s just one issue: most of Kona’s draft beers are actually brewed in Oregon, Washington, Tennessee, and New Hampshire. The plaintiffs allege Craft Brew knowingly duped consumers into paying more for “Hawaiian” beer in violation of various false advertising and consumer protection laws.
Although marketing with geographical imagery may not solely support false advertising actions, U.S. District Judge Freeman of the Northern District of California recently refused to dismiss the case. She focused on particular details of the packaging, such as the address and map of Kona with an invitation for customers to visit “the brewery,” implying there is only the one. Although there is a real brewery at the Hawaii address on the bottles, nearly all of the beer sold in the mainland United States is in fact made on the mainland. This implication, Judge Freeman stated, gives rise to a dispute about what a reasonable mainland consumer would view when buying the beer in stores.
Takeaway: Geographically-inspired product packaging may give rise to false advertising claims if the imagery implies that the products are made at the stated location.