Citing to dictionary definitions of “margarita,” “mojito,” “rose,” and “spritz,” a group of Anheuser-Busch-Rita-beverage-buying consumers is looking to get some money claiming they (and potentially all other purchasers) were duped into buying Anheuser’s Rita “Cosmos” and “Mojitos” expecting beverages made with spirits and not malt beverage bases.
These packaging examples from the complaint (link to complaint) demonstrate the main points, detailed through argument – that the use of certain words, both in common parlance and even in the regulatory updates from the Tax and Trade Bureau, lead consumers to believe, or have a common association with alcohol from different sources – i.e., wine and spirits, not beer.
The allegations make this point in several ways, first, they point to the exemplars above using words like “cocktails” and citing to drinks like mojito and margarita. As an example, here’s the gist about the packaging from the complaint – basically, the notice about the source of the alcohol isn’t anywhere a consumer would see it unless you lift up the package and turn it over:
“Moreover, nowhere on the front, sides, or top panel of the packaging (the consumer facing panels) does Defendant state that the Margarita Products do not have tequila, or that the Margarita Products are actually just flavored beers that taste like a margarita. Instead, the bottom panel of the packaging, where no reasonable consumer would look prior to purchase, contains a small font statement that the Margarita Products are actually “Malt Beverage[s] With Natural Flavors and Caramel Color”. In any event, to the extent seen on the underside packaging, reasonable consumers are unlikely to understand the foregoing “malt beverage” statement as meaning that the Margarita Products do not contain tequila, particularly in the context of the other prominent, false and deceptive statements on the front packaging indicating that the products do contain tequila. As a result of the foregoing, no reasonable consumer would expect that the Margarita Products do not contain tequila.”
There are also some interesting points about using terms like “tasting notes” (although that’s pretty common for beer now as well) and “Rose” and “Sangria”. One good allegation comes from citing to 27 CFR 7.29(a)(7)(iii) regarding misleading impressions on labels – attempting to downplay the allowance of a cocktail name as a brand name or a fanciful name on a malt beverage by emphasizing that such use is only allowed where it doesn’t create a misleading impression:
(a) Statements on labels. Containers of malt beverages, or any labels on such containers, or any carton, case, or individual covering of such containers, used for sale at retail, or any written, printed, graphic, or other material accompanying such containers to the consumer, must not contain:
….(7) Any statement, design, device, or representation that tends to create a false or misleading impression that the malt beverage contains distilled spirits or is a distilled spirits product. This paragraph does not prohibit the following on malt beverage labels:
(i) A truthful and accurate statement of alcohol content, in conformity with § 7.71; (ii) The use of a brand name of a distilled spirits product as a malt beverage brand name, provided that the overall label does not present a misleading impression about the identity of the product; or (iii) The use of a cocktail name as a brand name or fanciful name of a malt beverage, provided that the overall label does not present a misleading impression about the identity of the product.
The complaint also points out that ATF Ruling 2002-2 sought to clarify the position on this, but just cites to a few parts of the whole Ruling as though they were presumptions rather than citing to the holdings from the Ruling that specifically allowed the practice of using fanciful cocktail names on malt beverage labels:
With regard to the use of distilled spirits terms and brand names on labels and in the advertising of malt beverages, it is:
Held, for brand names.
- The use of a brand name of a distilled spirits product as the brand name of a malt beverage is not in itself misleading.
- The use of a distilled spirits term found in the standards of identity in 27 CFR Part 5 such as whisky, rum, vodka, brandy, gin, and so forth, as the brand name for a malt beverage is misleading. ATF will not approve labels where a distilled spirits term is used as the brand name for a malt beverage.
- The use of a coined term that is similar to or resembles a class and type of distilled spirits as part of the brand name for a malt beverage will be examined on a case-by-case basis to determine if it is misleading as to the identity of the product.
Held, for class and type statements including statements of composition and fanciful names.
- The use of a distilled spirits term found in the standards of identity in 27 CFR Part 5, or the use of a distilled spirits brand name, in the statement of composition or in the fanciful name for a flavored malt beverage is misleading as to the identity of the product. ATF will no longer approve labels where distilled spirits terms or brand names appear in the fanciful name or the statement of composition for a malt beverage.
- Use of a cocktail term as the fanciful name of a malt beverage is not misleading if there is no misleading impression about the identity of the product, based on the overall labeling and advertising of the product.
Held, for all other labeling and advertising statements.
The use of any distilled spirits terms found in the standards of identity in 27 CFR Part 5 or of distilled spirits brand names appearing in any other place on a malt beverage label or in an advertisement for a malt beverage will be presumed to be misleading.
- Use of cocktail terms on a label or advertisement for a malt beverage is not in itself misleading if there is no misleading impression about the identity of the product, based on the overall labeling or advertising of the product.
The use of a margarita glass on the external packaging of Lime-A-Rita is troubling:
But given the statement on the exterior (albeit on the bottom) that the drink is a malt beverage, I’m guessing this one gets dismissed sooner rather than later.