Craft beer is big business. With over $22 billion in sales in 2015, the medium-sized sector of the beer industry is growing rapidly.
The term “craft beer” has various definitions; the Brewer’s Association defines a craft brewer as small (fewer than six million barrels per year), independent (less than 25 percent owned/controlled by a company that is not a craft brewery) and traditional (whatever that means). That doesn’t stop plenty of major companies from having their own “craft” labels: Blue Moon, Goose Island, Lagunitas, and Shock Top, though.
And recently, Walmart entered the game, too. Last summer, Walmart rolled out several varieties of craft-looking beer under the Trouble Brewing label, including Cat’s Away IPA and After Party pale ale. But last month, the Washington Post looked more deeply into these beers and found that Trouble Brewing doesn’t actually exist, and that the beers were actually produced by the Genesee Brewing Company, a major manufacturer that sits under the umbrella of the sixth largest beer producer in the U.S., which is all to day: Trouble is pretty far from a mom and pop operation.
“We were intentional about designing a package that conveyed a look and feel you’d expect of craft beer,” a Walmart spokesperson told the Post.
Minor outrage erupted in the beer world, and one Ohioan filed a class-action lawsuit against Walmart for misleading the public into believing that these beers were produced by small operations. The claim of false advertising relies on the non-existence of Trouble Brewing, the placement in stores of Trouble beers next to legitimate craft beers rather than macro-beers like Budweiser, the tendency of consumers to believe craft beers are of higher quality than macro-beers, and the statements made by Walmart to the Post. “It is a wholesale fiction created by the Defendant in order to deceive customers,” writes the claimant.
Craft beer, owing to its lower production and theoretically higher quality, is typically significantly more expensive than macro-beers. The claimant suggests that by positioning Trouble beers as craft beer, Walmart was thus able to charge a higher price than the product warranted by virtue of misleading customers.
Update: Walmart sent in a statement in response to our questions. Here it is: “We hold our suppliers to high standards and are committed to providing our customers the quality products they expect. We take this matter seriously and intend to defend ourselves against the allegations.” Not a ton of information in there, but note the wording: they pledge to “defend ourselves against the allegations,” rather than pledging to change any marketing or product presentation in response to the claims.