Suzie’s Brewery, maker of Suzie’s Organic Hard Seltzer, and Anheuser-Busch InBev agreed earlier this week to settle the Oregon company’s lawsuit against the world’s largest beer manufacturer for allegedly engaging in deceptive advertising practices for its Michelob Ultra Organic Seltzer brand.
The lawsuit — which Suzie’s filed on February 2 in U.S District Court for the District of Oregon, weeks after Michelob Ultra Organic Seltzer launched and was touted as “the only national USDA certified organic hard seltzer” in early television commercials — claimed that A-B was “using the bully-pulpit its massive national advertising budget allows” to launch a “false and misleading advertising campaign aimed at convincing health-conscious drinkers that its new organic hard seltzer is a unique, one-of-a-kind product.”
“To be clear, it is not,” Suzie’s wrote in its complaint.
The companies have agreed the matter is “fully settled,” and Suzie’s claims against A-B have been “dismissed without prejudice and without costs.” Additional terms of the settlement were not disclosed.
The path to a settlement was dramatic.
In a response to Suzie’s first complaint filed March 4, A-B asked that Suzie’s complaint be dismissed with prejudice, in part “because Suzie’s brought this claim in bad faith.”
“Contrary to its allegations in the complaint, Suzie’s principals have previously touted the benefits of being a small, rather than national, company, Suzie’s has never included ‘USDA certified as a central aspect of its marketing, and in some cases has obscured or covered the USDA logo on its products, and Suzie’s and/or its related companies have engaged in misleading advertising of non-organic products as organic,” A-B wrote. “Each of these, standing alone or taken together, make it inequitable for Suzie’s to recover any damages from A-B in this case.”
Suzie’s won an early victory on February 9 when District Judge Michael H. Simon issued a temporary restraining order barring A-B from advertising Michelob Ultra Organic Seltzer as the first or only national USDA certified organic hard seltzer for 28 days.
However, Suzie’s filed a motion on March 18 to hold A-B in contempt of court for violating the temporary restraining order after Suzie’s learned of Michelob Ultra Organic Seltzer TV commercials with the barred copy airing on February 10 and 11, and heard ad copy with the language in a podcast on Spotify on March 11.
Between these two incidents, A-B explained to Suzie’s that “it had provided direction regarding the removal of the ads from ‘television, digital, radio, live reads, social posts, influencer posts, and any PR statements,’” according to the motion. When Suzie’s objected to the March 11 podcast ad, A-B said that “because Spotify and its podcast hosts are not Anheuser-Busch employees or agents and are not otherwise affiliated with Anheuser-Busch, there’s nothing more that Anheuser-Busch could (or was required to) do.”
The companies agreed to a stipulated protective order on March 16 to “protect the confidential nature of the information contained in documents, interrogatory responses, responses to requests for admission, and/or deposition testimony.”
Year-to-date through March 21, dollar sales of Michelob Ultra Organic Seltzer have reached $24.3 million, according to market research firm IRI. Since its January launch, the brand has captured 2.3% of the $4.1 billion hard seltzer market, according to data from Fintech and the National Beer Wholesalers Association.