What Is The Wal-Mart Fake Craft Beer Lawsuit All About?

A headline you have already seen time and time again: Wal-Mart Fake Craft Beer Lawsuit.

Yes, Wal-Mart is being sued over their Trouble Brewing “craft beer”. Craft beer is growing and large companies have taken notice; they want to get a piece of the profit in this growing trend.

But has Wal-Mart gone too far and used deceptive marketing techniques to sell their brand of craft beer?

Background

In early 2016, Wal-Mart began selling 4 beers under the name Trouble Brewing. Cat’s Away IPA, After Party Pale Ale, Round Midnight Belgian White, and Red Flag Amber are the four options. This beer is sold in the craft beer section of over 3,000 Wal-Mart stores in 45 states.

While it is intended to look like craft beer; most would say it falls short. The beer is brewed by a contract brewer Genesee out of Rochester, NY and was developed by WX Brands which is a company that helps create private label alcohol brands. All of this is done behind the scenes while the consumer thinks it is brewed by a craft brewery called Trouble Brewing but that company doesn’t even exist.

Then on February 10, 2017, Matthew Adam of Ohio filed a class action lawsuit against Wal-Mart for deceptive marketing practices. You can read more about this lawsuit here, including a link to download the court filing. He claims that the beer doesn’t not qualify as craft beer based on the Brewers Association’s definition. He accuses Wal-Mart of using shady marketing to sell their beer to unsuspecting consumers. You can read more about it here as well.

Key Factors

Is It Craft Beer?

The foundation of this lawsuit is the Brewers Association’s definition of craft beer. While that is a good place to start, the term craft beer is often debated. I have written about what I consider to be craft beer and it is different than the Brewers Association. There is not clear definition of craft beer and that could be an issue when this gets to court.

Do I think it is craft beer?  I have not tried it yet but my assumption is they used very simple recipes with low cost ingredients to maximize profits. If that is the case, then I would say it doesn’t belong in the craft beer section. Wal-Mart will argue that the term “craft beer” is subjective and they may have a point.

Deceptive Marketing

Wal-Mart created a fictional brewery, appealing branding and placed it on the shelf next to other craft beer. It was their intention to have craft beer fans purchase their beer as if it was equivalent to other craft beers.

If this beer was labeled as the Wal-Mart brand of beer, craft beer fans would turn up their noses and keep walking.  I do believe that Wal-Mart was deceptive in their marketing and branding.

Private Labeling

Large companies have been using private labeling for decades. In most cases, these products are sold at a lower cost and claim to provide the same benefit, flavor, etc.

I am a huge fan of buying private label groceries. As long as the cereal tastes good, I don’t care what the package looks like or who made it. But that same logic does not apply to my beer decisions. I drink craft beer because I am looking for a certain level of quality and am willing to pay more for it. Wal-Mart wants to charge craft beer prices for their private label beer.

The Lawsuit Isn’t Really About Craft Beer

Matthew Adam and others feel tricked by Wal-Mart and I would have to agree that what they did was wrong. But whether or not we like their beer is not on trial here. It’s not about the beer. The court doesn’t care if someone didn’t like the beer they purchased. If that was the true, then we could all sue a few breweries.

What is on trial is the right for the consumer to be informed versus the right for a company to produce and market a private label product.

If the court favors the consumers right to know then Wal-Mart will probably have to list on the packing that it is their brand. They may have to repay customers that purchased the beer. But the larger picture would be the thousands of other private label products that are marketed in a similar way. Would a ruling in this case impact those companies and products?

What The Future Holds

The most important part of this story is acknowledging that large companies want a part of the craft beer boom. As long as craft beer continues to grow. these conglomerates will continue to find ways to get a piece of the pie. Whether it is private label/store brand beer or a craft beer buyout, this is not going away any time soon.

On the bright side, Trouble Brewing may be the gateway beer for someone to move away from the American light lagers they have been drinking. Even if most craft beer enthusiasts consider it a lower quality product, it might lead them down the path of enjoying more flavorful beer in the future.

Either way, as long as craft beer is growing there will be more and more competition and it won’t always be good, high quality products. But the one thing that they can’t replicate is power of the craft beer community. Wal-Mart isn’t changing how people meet and connect. Large companies may buy their way into the craft beer market but they won’t buy their way into the craft beer community.

Have You Tried Wal-Mart’s Trouble Brewing?

Did you buy it under the assumption is was craft beer?

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