Anheuser-Busch (A-B) agreed to provide an uncapped monetary fund to settle claims that the company falsely advertised the brewing location for Beck’s brand beer.
Consumers claimed that the labeling on Beck’s Pilsner, Dark, Light, and Oktoberfest beers misled consumers into believing that the drinks were imported from Germany when the beer was in fact brewed in Missouri. The suit sought to certify nationwide and state-specific classes in California, Florida, and New York based on violations of various consumer protection laws.
A-B countered that it added a disclaimer to the packaging, but a Florida federal court judge denied a motion to dismiss, holding that the “Product of USA” label was small, hard to read, printed in metallic white on a metallic silver background, and worst of all, the words were blocked by the carton.
That ruling spurred the parties into mediation and a settlement agreement for the estimated “thousands” of class members dating back to May 2011.
The deal provides for both monetary refunds and injunctive relief. Partial refunds will be provided on a sliding scale, ranging from $0.10 for an individual bottle or can up to $1.75 for each bottle in a 20-pack. Reimbursements with proof of purchase will be capped at $50 per household, while claims that are not supported by proof of purchase are capped at $12 per household (although the amount per bottle or can remains the same).
For the injunctive relief, A-B said it would include either the phrase “Brewed in USA” or “Product of USA” on Beck’s beer bottles and cans for at least a five-year period, subject to regulatory approval by the Alcohol and Tobacco Tax and Trade Bureau. The phrase will appear on the front and back of all consumer-facing packages and the “About Beck’s” page of the company’s website.
“The type face, type size, position, color, and setoff of the disclosures will be agreed by the parties to be sufficient to inform a reasonable consumer of the place where Beck’s Beer is brewed while not unduly impairing A-B’s marketing,” according to the plaintiff’s motion for preliminary approval of the settlement agreement.
Anheuser-Busch also agreed to pay $5,000 awards to the three named plaintiffs and not to oppose $3.5 million in counsel fees and expenses.
Urging the court to grant preliminary approval of the deal, the plaintiffs noted that the parties engaged in extensive discovery (more than 28,000 documents, a dozen depositions, and multiple experts retained) and substantial settlement negotiations to reach the agreement. The class members were all exposed to A-B’s allegedly “standard and uniform practice of false, misleading, and deceptive packaging and advertising,” the plaintiffs argued.
The benefits provided by the settlement “fall squarely” within the range of reasonableness, the plaintiffs added, referencing a similar settlement in a case brought against Kirin beer by the same class counsel, where class members were entitled to up to $50 per household.
To read the plaintiffs’ motion for preliminary approval of the settlement in Marty v. Anheuser-Busch Co., click here.
Why it matters: The deal provides for an uncapped settlement fund for a nationwide class of consumers dating back to 2011, although individual households are limited to a maximum of either $12 or $50, depending on whether a proof of purchase is provided by the class member.