Craft Brew Alliance Agrees to Settle Kona Labeling Dispute

Craft Brew Alliance (CBA) has agreed to settle a years-long class action lawsuit over alleged “false and deceptive advertising” of its Kona Brewing beer brand.

In an SEC filing, the publicly traded Portland, Oregon-based craft beer company – which also owns the Widmer Brothers, Redhook, Omission, Square Mile Cider, Appalachian Mountain Brewery, Wynwood Brewing and Cisco Brewers labels – today said it expects to incur costs of about $4.7 million to settle the dispute, which surfaced in early 2017.

That amount is inclusive of all legal and administrative fees but does not represent the total amount CBA will pay to the class, according to Marcus Reed, the company’s general counsel.

According to Reed, the nationwide settlement will be open to consumers who purchased Kona-branded beer products dating as far back as 2013.

More details about the settlement agreement are expected by May 23, when both parties are expected to file a preliminary motion for approval. A hearing for preliminary approval is slated for October 24, 2019, according to the filing.

The original complaint alleged that CBA, “intentionally misleads consumers into believing that Kona Brewing Company beer is a local beer made in Hawaii.”

Although CBA maintains a production facility in Hawaii and produces thousands of barrels on the island, it produces a majority of the Kona beer sold in the continental U.S. at facilities in Portland, Oregon, Portsmouth, New Hampshire, and at an Anheuser-Busch brewery in Fort Collins, Colorado.

Speaking to Brewbound, Reed said the company agreed to a settlement after two years of litigation because it was becoming a “distraction” to the company’s day-to-day business.

“It got to the point where it was time to reach a settlement,” he said.

Additional details are available in the company’s SEC filing.

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