When May A Brewer Market Its Beer As “Craft Beer”?
The Brewer’s Association defines a “craft brewer” as being “small, independent, and traditional.” “Small” meaning with “annual production of 6 million barrels of beer or less.” “Independent” meaning “less than 25% of the craft brewery is owned or controlled by an alcoholic beverage industry member that is not itself a craft brewer.” “Traditional” meaning “a majority of [the brewer’s] total beverage alcohol volume i[s] beers whose flavor derives from traditional or innovative brewing ingredients…”
While this definition may be helpful to industry members and consumers, the fact is that there is no legal definition of “craft brewer” or “craft beer” codified in any law nor published in any state or federal authority’s guidelines. So what then are the rules and regulations that govern which brewers may make use of these terms in their marketing? This question has been the subject of recent litigation in California.
On April 24, 2015, a home brewer from San Diego filed a class action complaint against MillerCoors, LLC (“MillerCoors”) alleging that the beer manufacturer engaged in “false and deceptive marketing” by advertising its Blue Moon brand of beer as a craft brew. Especially problematic for the plaintiff was the use of the trademarked term “Artfully crafted” on the Blue Moon packaging, despite the beer being made by a such a large-scale manufacturer; according to the complaint, MillerCoors manufactures more than 2.4 billion gallons of beer annually and therefore does not fit within the Beer Association’s definition of “craft brewer.”
As support, the complaint cites Section 17500 of the California Business and Professions Code, which makes “it unlawful to make an untrue or misleading statement in connection with the sale or dissemination of goods or services if the person making the statement knew or should have known the statement was untrue or misleading.” In addition, the complaint cites to Section 17505 of the California Business & Professions Code, which states that:
No person shall state, in an advertisement of his goods, that he is a producer, manufacturer, processor, wholesaler, or importer, or that he owns or controls a factory or other source of supply of goods when such is not the fact, and no person shall in any other manner misrepresent the character, extent, volume, or type of his business.
But MillerCoors’ choice to create and sell its Blue Moon brand of beer is not the problem; it is a common business practice for companies to create sub brands for their different product lines, whether doing business in the alcoholic beverage industry or not. The real issue, which may now be decided by courts, is whether or not MillerCoors’ choice to use the trademark “Artfully crafted” on its Blue Moon brand was indeed a choice that led to confusion amongst consumers. If this class action suit is litigated, the alcoholic beverage industry may just find itself with a legal definition for “craft beer” and “craft brewer” in near future.
© 2015, Law Offices of Stephan Passalacqua