Parties Brew Settlement in False Ad Suit Over Beer’s Location

Advertising Law

To resolve allegations that Asahi Beer deceptively marketed its beverages as being brewed in Japan—when in reality the beer was made in Canada—the company agreed to pay up to $10 per class member in a settlement agreement.

A pair of plaintiffs filed suit in California federal court challenging the packaging and labeling of Asahi Beer. The use of Japanese script and characters on the labeling and packaging led reasonable consumers of the product to believe it was brewed in Japan, they argued.

Following the California federal court’s denial of the defendant’s motion to dismiss, the parties engaged in discovery and mediation that led to their settlement agreement.

Pursuant to the agreement, consumers of the Asahi beverages between April 5, 2013, and December 20, 2018, are eligible to receive a piece of the settlement fund depending on the size of the drink they purchased. Class members (estimated in the “thousands”) can receive 10 cents per big bottle, 50 cents per six-pack of bottles or cans, $1 per 12-pack of cans, and $2 per 24-pack of cans.

As for injunctive relief, Asahi promised to bold the term “Product of Canada” on the neck of the label of the bottle for three years.

The defendant also agreed to pay up to $765,000 for attorney fees and costs, up to $5,500 for service awards to the two class representatives, and an estimated $300,000 for administrative expenses.

U.S. District Court Judge Amy Hogue signed off on the deal, deeming the settlement agreement “fair, adequate and reasonable” at the preliminary approval stage.

To read the order in Shalikar v. Asahi Beer USA, click here.

Why it matters: Consumer class actions alleging false advertising based on the brewing location of various beverages have been popular in recent years, with a similar suit accusing Kona Brewing Company of tricking consumers into believing its beer line was locally brewed in Hawaii by invoking imagery of and references to the islands (such as maps of the islands, hula dancers and surfers) even though the beer was brewed on the mainland. A California federal court denied the defendant’s motion to dismiss that suit, ruling that the representations went beyond mere puffery and that a reasonable consumer could believe the beer was made in Hawaii.



pursuant to New York DR 2-101(f)

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