Craft Brew Alliance Sued Over Kona Not Being Brewed in Hawaii

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A pair of California consumers are alleging Craft Brew Alliance tricked them into paying more for Kona beer by marketing it as brewed in Hawaii.

The 56-page complaint, filed Tuesday by the Wand Law Firm, details how Craft Brew Alliance allegedly used “false and deceptive advertising” to dupe consumers about the origin of Kona Brewing Co. beer sold in the U.S.

Many Kona Brewing products are brewed at CBA breweries in New Hampshire, Oregon, Washington as well as at City Brewing in Tennessee.

“Consumers purchase items, and are willing to pay more for items, because they are from Hawaii,” the lawsuit reads. “Craft Brew is well aware of this.”

The lawsuit filed by Sara Cilloni and Simone Zimmer is seeking class-action status.

Craft Brew Alliance spokeswoman Jenny McLean said the company just learned about the lawsuit yesterday and declined to comment on the pending litigation.

The Kona Brewing Company website acknowledges that about 12,000 barrels of beer are produced at the company’s brewhouse in Kailua while the beer produced in the continental U.S. is made “under strict guidance” and with the “recipes and beer specifications are dictated by Kona Brewing Company’s brewmaster, who oversees each of Kona Brewing Company’s partner breweries as the beer is brewed and packaged.”

“The beer brewed at Kona Brewing Company’s partner breweries utilizes Kona’s hops, malt and proprietary yeast,” the website reads. “The water mineral levels at each brewery are adjusted to replicate the water used in Hawaii. A sample of each batch of beer is sent to the Kailua Kona brewery for sensory evaluation. The brewmaster and quality assurance employees are in daily contact with mainland partner breweries. An integral component of Kona Brewing Company’s business plan is to grow the business with ecological integrity, reducing the company’s carbon footprint whenever possible. By producing its bottled beer and mainland draft beer on the mainland, close to markets, Kona Brewing Company has dramatically reduced its reliance upon transportation fuel for raw materials, packaging and distribution.”

Read the full complaint here.

In 2015, a federal judge approved a nearly $20 million settlement against Anheuser-Busch InBev NV for allegedly deceiving consumers into believing Beck’s was brewed in Germany when it was really made in St. Louis, Reuters reported.

However, a federal judge tossed out a similar class-action lawsuit against Red Stripe maker Diageo-Guinness last year in which consumers claimed they were duped into buying the Jamaican-style beer that is actually brewed in the United States.

U.S. District Judge Barry Ted Moskowitz dismissed the complaint without prejudice, according to Courthouse News.

“The Court finds that a reasonable customer would not be misled by the visible packaging into believing that Red Stripe is brewed in Jamaica with Jamaican ingredients,” Moskowitz wrote. “The mere fact that the word ‘Jamaica’ and ‘Jamaican’ appear on the packaging is not sufficient to support a conclusion that consumers would be confused regarding the origin and ingredients of the beer.”

In that action, Aaron Dumas and Eugene Buner sought class-action status and damages reportedly for “false advertising, unfair competition, business law violations and negligent and intentional misrepresentation” claiming they bought Red Stripe due to the label calling out “Jamaican Style Lager” and “The Taste of Jamaica.”

Diageo-Guinness purchased Red Stripe in 1993 and began producing it in the U.S. in 2012 at City Brewing Co. in Latrobe, Pennsylvania.

In December, Heineken announced that it was importing to the U.S. the first cases of brand produced in Jamaica for sale at retail. In a press release, the company announced:

“Following the acquisition of a controlling stake of Red Stripe in October 2015, HEINEKEN has successfully brought production of the beloved brand home as part of the company’s broader mission to deliver true import brands that exemplify the transparency and authenticity consumers expect and deserve.”

In February, consumers in Ohio filed a class-action lawsuit against Walmart claiming the retail giant used its private-label beer to deceive customers. The lawsuit, filed in Hamilton County Court of Common Pleas, claims the four beers produced for Walmart — Cat’s Away IPA, After Party Pale Ale, Round Midnight Belgian White and Red Flag Amber, which are sold in 45 states — do not meet the Brewers Association’s definition of “craft beer.”

The beers are being made at Rochester, New York-based Genesee Brewing, owned by Costa Rica’s Florida Ice and Farm Company, but the labels lack any mention of Walmart or the private label brand developer “WX,” which is named in Alcohol and Tobacco Tax and Trade Bureau filings.

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