While trademark infringement is the headliner for claims brought under the Lanham Act, the law also precludes false advertising and unfair competition. Most states also have laws addressing deceptive trade practices addressing similar misconduct by advertisers. Recently one consumer sued MillerCools under these laws, claiming he had been deceived into purchasing Fosters beer, thinking the beer was made in Australia.

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The plaintiff pointed to the red kangaroo and star constellation prominently displayed on the front of the can. The red kangaroo is closely associated with Australia and you may recognize the star constellation from the Australian flag (below):

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The plaintiff also pointed to the history of Fosters beer. It was first brewed in Australia in 1887, and first exported to the U.S. in 1972, in large 25.4 ounce containers “shaped like motor oil cans.” Into the late aughts, however, the Fosters beer sold in the U.S. was brewed stateside at Oil Can Breweries in either Albany, Georgia or Fort Worth, Texas. Yet television commercials maintained similar themes, such as the “Fosters: Australian for Beer Commercials.” Compare this 1996 commercial with this 2011 commercial. If you watched them both, you likely noticed the word “Imported” disappeared from the front of the can between 1996 and 2011.

Notwithstanding the imagery, MillerCoors prevailed on a Motion to Dismiss. The company pointed to the disclaimer on the side of the can, which states that the beer is “Brewed and packed under the supervision of Foster’s Australia Ltd, Melbourne Australia by Oil Can Breweries, Albany GA and Fort Worth TX.”  The court found this to be a sufficient disclaimer under the circumstances and, in light of the commercial context, no consumer would be reasonably deceived into thinking the beer was imported from Australia.

The Fosters decision is the latest in a trend of victories for beer companies battling consumers who claim that the beer deceptively suggests that the beer is actually imported from another country. Red Stripe and Sapporo both prevailed in overcoming lawsuits alleging the companies’ advertising deceived consumers into thinking their beer was imported from Jamaica and Japan respectively.

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Not all breweries have been as lucky, however. The makers of Kirin and Beck’s both settled lawsuits that resulted in payouts to consumers. And even though Red Stripe prevailed, consumers can perhaps claim a moral victory with the company’s decision to move operations back to Jamaica.

  • So it’s perfectly okay for companies to engage in false advertising as long as they include a disclaimer? But what if surveys show that a significant percentage/number of consumers are being deceived?

    • James Mahoney

      If the beer tastes just as crappy–depending on your tastebuds, of course–regardless of where it’s made, is that really false advertising?

      Seriously, though, if a drinker of a formerly imported beer can discern no difference in taste between that and the current, domestically brewed beer, what’s there to get all hopped up about?

      I s’pose some purists might say that they buy the beer primarily because they want to support their home, ancestral or favorite country. That argument probably falls flat, too, as far as legal recourse is concerned.

      As far as the false advertising accusation goes, where is the falsity? The beer tastes the same, which means they use the same formula and ingredients (with the possible exception of the water, and maybe not even that exception). By that logic, Haagen Dazs ice cream is guilty as sin for implying by its name that it’s some Scandinavian import.

      Any survey will show that a significant number of people think Foster’s is an Australian beer brand (which it is), and all that will prove is the Foster’s marketing has been effective, and that people conflate brand with product. They’re not the same: All Foster’s is Australian brand beer, not all Foster’s beer is necessarily brewed in Australia. (See the Foster’s Wikipedia entry.)

      • Isn’t it geographically deceptive branding/marketing? You and I may not care where Fosters beer is actually made, but that just means we’re not their target market if we don’t care. But it obviously matters to a lot to MillerCoors because they clearly want Fosters beer consumers to think Fosters is still imported from Australia.

        • James Mahoney

          First off, if we like Foster’s beer, then by definition we are the target market, whether we care or not about where the beer is made.

          Second, as noted in my DuetsBlog titled “Is the Taste as Sweet?”, some of us feel a diminished pleasure in our enjoyment of a consumable or other branded product when we learn that something that we consider fundamental has changed; to wit, a large corporation acquiring the brand or a change in where the thing is manufactured.

          Additionally, and on the beer subject, some major mainstream brewers produce “craft” beers with oh-so-trendy names that certain demographics will try, and possibly like, until they realize who’s behind the label. (Ditto for many consumer-targeting brands.) Is that also deceptive, since the actual brewer clearly isn’t a “craft” brewer, and the name might allude to some evocative geographical area that is far from where the stuff is actually brewed?

          None of this, in this non-lawyer’s mind, constitutes deception. If suddenly discovering “brewed in Poughkeepsie” in 6 pt type on the can makes you throw up, and especially after drinking some large, but indeterminate volume of said beverage on multiple occasions over lengthy periods of time, then stop buying the beer.

          But to sue for “damages,” even if it’s to clean the oriental carpet receiving said reactionary vomit? I don’t think so.

          I might agree with your deceptive judgement under different circumstances: Say the Foster’s brand was a marketing creation of MillerCoors from the get-go, and was never brewed or never existed as an “Australian beer.” And they made the same marketing campaign as Foster’s did, then you may have a (slim) case for deceptive branding. (Pass the Haagen Dasz, darling.)

          But even then, I don’t think anyone would prevail in a court of law by arguing that they were damaged by the marketing. The invisible hand of the market (which I think Adam Smith called the Milli-Vanilli Rule in his Wealth of Nations) would take care of punishing the transgressing brewer.

          Regarding geographically deceptive branding, what about Coke or MacDonald’s or any number of international and internationally licensed brands? They are indisputably “American,” but manufactured and/or sourced locally around the world. Deceptive? Is Mexican Coke, avidly sought after by those around here who want real sugar in their Coke, non-genuine?

          And finally, what does the resident hops expert, Martha Engel, think about all this?

          • I should tell you both that since the late 80’s, no Australian drinks the stuff. We have a loving colloquial description of beer as “P!ss”, but Fosters is considered to be “camel’s p!ss”

          • James Mahoney

            I rest my case. Though I can’t resist observing that, as far as taste is concerned, it probably makes no difference where the particular camel resides.