According to a news source, New Jersey residents have filed a putative
class action in state court against the Texas-based company that makes
Tito’s Handmade Vodka®, the fourth such action filed within the past two
months, alleging that promoting and labeling the product as “handmade”
deceives consumers because the vodka is made in an industrial facility and
the company sells more than 15 million bottles a year. McBrearty v. Fifth
Generation, Inc. The first complaint was filed in California in September 2014
and subsequently removed to federal court, Hofmann v. Fifth Generation, Inc.;
the second followed in early October in an Illinois state court, Aliano v. Fifth
Dimension, Inc.; the third was filed in a Florida federal court, Pye v. Fifth
Generation, Inc.

The complaints variously refer to the company’s website and a Forbes article
purportedly featuring images of old-time pot-still production (“i.e., in a shack
containing a pot still cobbled from two Dr. Pepper kegs and a turkey-frying rig
to cook bushels of corn”). In essence, the complaints contend that consumers
pay a premium for the product, believing that something “handmade” is
of higher quality because it is “produced in small batches using little to no
machinery or automation.” The Illinois plaintiffs allege that the company refers
to itself as a “microdistillery,” while industry standards place the cutoff for this
designation “at about 25,000 to 40,000 cases per year. However, Defendant
produces around 850,000 cases per year—roughly 30 times the maximum
production capacity to be considered a ‘microdistillery.’”

Fifth Generation owner Tito Beveridge promised a vigorous defense, saying,
“All of our labels have gone through the approval process of the Department
of the Treasury’s Alcohol and Tobacco Tax and Trade Bureau (TTB). After
sending a field agent to Austin to review our processes, the TTB has approved
our use of ‘Handmade’ on our label. We think our pot still batch distillation
is one of the key things that differentiates us from a great majority of other
vodkas. We disagree with these claims and will defend ourselves against this
misguided attack.” A leading distributor who handles the product questioned
what “handmade” means. “It’s not easy to define, as hands obviously are involved throughout the process.” See Shanken News Daily, September 23,
2014; Courthouse News Service, November 10, 2014.

 

Issue 545

 

About The Author

For decades, manufacturers, distributors and retailers at every link in the food chain have come to Shook, Hardy & Bacon to partner with a legal team that understands the issues they face in today's evolving food production industry. Shook attorneys work with some of the world's largest food, beverage and agribusiness companies to establish preventative measures, conduct internal audits, develop public relations strategies, and advance tort reform initiatives.

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