Kombucha Maker Alleges Rival Products Gain Unfair Market Advantage
The maker of Kombucha Dog beverages has filed lawsuits against Trader Joe’s Co. and other kombucha producers alleging the companies misrepresent the amount of alcohol and sugar in their products and violate federal and state laws regulating the sale of alcohol beverages. Tortilla Factory, LLC v. Trader Joe’s Co., No. 18-2977; Tortilla Factory, LLC v. Better Booch, LLC, No. 18-2980; Tortilla Factory, LLC v. Makana Beverages, Inc., No. 18-2981; and Tortilla Factory, LLC v. Rowdy Mermaid Kombucha, LLC, No. 18-2984 (C.D. Cal., filed April 9, 2018).
According to Tortilla Factory’s complaints, kombucha’s post-bottling fermentation can cause it to develop an alcohol content of 0.5 percent or more by volume, subjecting it to regulation under federal law, including Alcohol and Tobacco Tax and Trade Bureau regulations that govern production, labeling and distribution. The complaints assert that independent testing revealed that the defendants’ products contain between 1.0 and 2.7 percent alcohol but are either labeled as containing “Less than .05% alcohol by volume” or carry no alcohol warning label. As a result, the plaintiff alleges, its competitors can market and sell their products to minors, distribute their products through “less expensive and broader” grocery distribution channels and avoid state alcohol-beverage taxation. In addition, the complaint asserts the competitors’ beverages contain more sugar than stated on the labels, giving the companies unfair advantage in the “health-sensitive” marketplace.
Claiming false advertising under the Lanham Act and California law along with unfair competition, the plaintiff seeks injunctive relief, corrective advertising, restitution, disgorgement, damages and attorney’s fees from all defendants.