A customer sued Tito’s Handmade Vodka claiming the distiller misled consumers into believing it was handmade when the production process was actually “highly automated.”
Recently settled, the customer was bringing a class action suit because the product name deceived consumers into paying premium prices for what they thought was a handmade product (as the name clearly indicated) when it was no longer made according to the original old fashioned pot still process in small batches. Having grown in popularity, production of the vodka is now made on an industrial scale in “10 floor-to-ceiling stills and bottling 500 cases an hour.” Moreover, it is no longer hand made because the automated machinery involves little to no human involvement. Consumers were allegedly misled into paying a higher price due to “better quality associated with handmade products.”
The lesson here is that craft beverage manufacturers should re-evaluate marketing messages and label content as they grow to be sure the statements and messages are still accurate. Situations that can potentially lead to consumer descriptive trade practices include:
- contract manufacturing, especially if production is moved outside the same local geographic area and marketing messages claim it is made in a certain place
- production volume increases when marketing messages tout small batch, hand-made or other artisanal references and production begins to reach commercial production volumes
- change of suppliers if ingredients come from a different geographic area and marketing messages claim ingredients are sourced from a certain place or are “local”
The case is Singleton v. Fifth Generation Inc., case number 5:15-cv-00474, in the U.S. District Court for the Northern District of New York.