Barhyte

A federal judge found on Tuesday, Feb. 9, that Anheuser-Busch’s advertisements portraying its Michelob ULTRA Hard Seltzer as “the only” or “the first national USDA certified organic hard seltzer” are false. Barhyte Specialty Foods' subsidiary Suzie's Brewery Co. in Pendleton had filed the lawsuit.

PORTLAND — A federal judge found on Tuesday, Feb. 9, that Anheuser-Busch’s advertisements portraying its Michelob ULTRA Hard Seltzer as “the only” or “the first national USDA certified organic hard seltzer” are false.

“Truth matters,” U.S. District Judge Michael H. Simon wrote in his 25-page opinion.

He issued a temporary restraining order for the beverage maker to halt the deceptive ads.

Owners of Suzie’s Brewery in Pendleton started selling Suzie’s Seltzer in July 2020 after receiving federal certification for the organic hard seltzer, and sought the court action after spotting TV ads for the Michelob product during an NFL championship playoff game on Jan. 24.

In the commercial titled “Not Playing Around,” the ad described Michelob ULTRA Organic Seltzer as “the only national USDA Certified Organic Hard Seltzer. We’re not playing around.”

In subsequent Instagram posts by so-called social media influencers, the product also was promoted as “the first National USDA Organic Seltzer,” according to the opinion and court argument.

The judge said Anheuser-Busch can continue to advertise that its Michelob hard seltzer is “the only” or the “first” USDA-certified organic hard seltzer that is distributed nationally.

Chris Barhyte, the founder and chief executive officer of Suzie’s Brewery, said his family-owned business was distributing its USDA-certified organic hard seltzer for at least five months before Anheuser-Busch’s Michelob brand. Suzie’s Seltzer received its national certification on June 1, 2020, and entered the market the following month.

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Michelob ULTRA Organic Seltzers began selling in January after the product was certified as organic on Aug. 19, 2020, and is available in all states except Utah, which has a unique regulatory scheme, according to court records.

All Suzie’s Brewery is asking for is a “fair, even playing field,” attorney Daniel C. Peterson told the court during a hearing on Monday, Feb. 8. He acknowledged that Suzie’s Seltzer is available only in six states.

“We don’t dispute that we are not nationally available,” Peterson said. “The bottom line is the way that they are advertising this is false. They are not the only entity or the only product certified as organic by the USDA and Suzie’s is entitled to the relief requested.”

Anheuser-Busch’s lawyer James F. Bennett countered that its ads could reasonably be interpreted as accurate and urged the court to consider the adjectives used.

“We believe our words can be interpreted to mean that all of those adjectives — ‘first’ or ‘only,’ ‘national,’ ‘USDA certified,’ and ‘hard,’ all modify ‘seltzer,’” he said during the hearing.

The judge interrupted.

“I have no idea what is a national seltzer,” Simon said. “I know what a delicious seltzer is. I know what a hard seltzer is. I know what a low calorie or no calorie seltzer is. I know what a flavored seltzer is. I have not a clue what is a national seltzer. Now, perhaps what you’re saying is that you’re saying that a national seltzer is a seltzer that is distributed nationally ... but there seems to be a big difference between saying that a seltzer is distributed nationally versus calling a seltzer national, expecting people to understand what you mean by that.”

In his opinion, Simon wrote that Anheuser-Busch’s interpretation of the words in its advertisement isn’t reasonable.

He distinguished between coordinate adjectives — which appear in sequence modifying the same noun and generally are set off by commas or the word “and” — and compound modifiers that function as a unit, such as the words “national USDA certified organic hard” in the Anheuser-Busch ad.

The judge found the word “national” as used in the ad modifies “USDA certified organic” not seltzer and wrote that he doubted the word “national” was placed due to “careless copywriting,” noting that Anheuser-Busch spent roughly $590,000 to develop, produce and distribute its ads.

“The challenged statements are literally false on their face,” he wrote. “Even if Defendants’ reading were reasonable, however, the challenged statements still are likely to mislead, confuse, or deceive consumers.”

The judge further pointed to questions raised by a distributor of Suzie’s Seltzer, who asked the Suzie’s sales director whether Suzie’s was “really USDA-certified organic” after seeing the Michelob ULTRA commercial.

“The fact that a presumably knowledgeable beverage distributor could be misled by Anheuser-Busch’s commercial is additional circumstantial evidence that less sophisticated consumers were and can be deceived,” the judge wrote.

In response to the judge’s ruling, Anheuser-Busch spokeswoman Jennifer Morris said, “The truth matters. Michelob ULTRA Organic Seltzer is the first USDA Certified Organic hard seltzer distributed nationally. The Court’s Order allows us to continue making this true statement.”

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