The maker of Kona beer agreed to offer partial refunds to settle a lawsuit claiming it misled consumers in the continental United States into believing the craft brew was actually made in Hawaii, causing them to overpay.
Settlement papers were filed last week with the federal court in San Francisco, and require a judge’s approval.
Craft Brew Alliance Inc, which makes Kona, said on Thursday it has taken a $4.7 million pretax charge for the expected overall cost.
The Portland, Oregon-based company was accused of deception for putting hula dancers, surfers, the Kilauea volcano and other Hawaiian images on beers with such names as Big Wave Golden Ale, Fire Rock Pale Ale and Longboard Island Lager.
Beer drinkers claimed they were confused despite disclaimers that Kona was brewed in New Hampshire, Oregon, Tennessee and Washington state. Kona draft beer sold in Hawaii was brewed there, they added.
The settlement offers refunds of $1.25 to $2.75 for purchasers since Feb. 28, 2013 of four-, six-, 12- and 24-packs of Kona, with maximums per household of $20 with receipts and $10 without receipts.
Lawyers for the consumers plan to seek up to $2.9 million to cover legal fees and costs, court papers show.
Craft Brew Alliance also owns the Redhook and Widmer Brothers brands, and is nearly one-third owned by an affiliate of Anheuser-Busch InBev NV, according to Refinitiv.
In 2015, Anheuser won U.S. court approval for a roughly $20 million settlement of claims it tricked consumers into thinking its St. Louis-brewed Beck’s beer was actually a German pilsner.
The case is Broomfield et al v Craft Brew Alliance Inc et al, U.S. District Court, Northern District of California, No. 17-01027.
(Reporting by Stempel in New York Editing by Matthew Lewis)
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