Craft Beer Lawsuit

Consumers who purchased craft beer from Walmart are now suing the store. Although the beer they bought has names such as Red Flag Amber that signify craft beer status, all the beer is contract brewed at Genesee Brewing in Rochester. The plaintiffs claim that the beer  does not meet the Brewer’s Association of craft beer as “small, independent and traditional.” One issue for the consumers is price. The lawsuit claims the beers are falsely marketed as craft beer to garner an “inflated” price. Coors faced a similar suit about Blue Moon but it was thrown out last year.

The definition of craft beer is a slippery slope and the Brewers Association has changed it several times., partially to enable Boston Beer, brewers of Sam Adams, to continue to claim  the craft beer designation. Boston Beer began the trend of pricing domestically produced “craft beer” at a price point between imports such as Heineken and mega produced beer like Budweiser. Ironically Sam Adams itself was contract brewed for many years.

Price is certainly an issue for consumers but many economists believe demand for alcoholic beverages including beer is inelastic which means people will continue to buy a beer they like even if the price goes up. Taste is perhaps the final arbiter. If Red Flag Amber tastes like a craft beer is Walmart then justified in selling it as such. The Brewers Association has never answered that question.


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