A federal judge has dismissed a proposed class action lawsuit alleging that Topo Chico Margarita Hard Seltzer is deceptively labeled because it is fermented and lacks tequila.
“The representations are misleading because the product does not contain tequila, absent from the ingredient list on the side panel of the packaging,” plaintiff Kari Warren wrote in a complaint filed on August 14 in the U.S. District Court Southern District of New York.
In a ruling issued on Friday, U.S. district judge Cathy Siebel wrote: “The product’s label contains no reference to ‘tequila’ and … the context provided by the product’s front label makes clear that it is a ‘hard seltzer,’ not a ready-to-drink cocktail containing tequila. Accordingly, the ingredient list confirms what the absence of the word ‘tequila’ on the label suggests – that the product does not contain it.”
Furthermore, Siebel ruled that Warren should have known Topo Chico Margarita Hard Seltzer lacked tequila because she purchased it at a grocery store in New York, where “cocktails containing hard liquor are not and cannot be sold.”
Warren’s lawsuit was filed against Coca-Cola, which licenses the Topo Chico brand to Molson Coors for production. In addition to Topo Chico Hard Seltzer, Molson Coors also produces Simply Spiked using Coca-Cola’s popular Simply juice brand and recently announced Peace Hard Tea.
Topo Chico Margarita Hard Seltzer launched in April 2022, three months after Molson Coors pushed Topo Chico Hard Seltzer nationwide following success in test markets in 2021. The company line-extended its hard Topo Chico offerings again this month with vodka- and tequila-based versions, but Topo Chico Margarita Hard Seltzer does not contain spirits.
Warren’s complaint cited definitions of margarita from Merriam-Webster, Wikipedia and the International Bartenders Association, which all include tequila, and indicated that the depiction of agave on the cans would lead consumers to believe tequila is included in the recipe. The complaint also claimed that “the term ‘hard’ in the context of alcohol refers to distilled spirits,” except in the case of “hard cider.”
In addition to its claims of fraud regarding the lack of tequila, Warren’s complaint also alleged the product is misleading because it doesn’t contain “an essential part of Topo Chico beverages,” sparkling mineral water from Monterrey, Mexico.
Judge Siebel wrote that this claim “is not plausible” because the “product’s label makes no claims that it was manufactured in Mexico or is otherwise connected to Mexico in any way, or that it contains sparkling mineral water of any kind.”
Warren was represented by Spencer Sheehan of Sheehan & Associates, a Great Neck, New York-based law firm that has filed several class action lawsuits against beverage-alcohol brands recently. In January, Sheehan filed a lawsuit against spirits giant Sazerac, claiming that its Fireball Cinnamon flavored malt beverage is deceptive because consumers confuse it with Fireball Cinnamon Whisky.
The Topo Chico Hard Seltzer brand family accounted for 3.7% of all hard seltzer segment dollar sales in the four-week period that ended March 25, according to a report from financial services firm Jefferies, which cited off-premise scan data from market research firm NIQ. During that period, Topo Chico’s dollar sales declined -1.6% compared to the same four weeks last year. However, for the 12 weeks ending March 25, dollar sales of the brand family increased +21.1%.
Molson Coors is the fourth-largest hard seltzer vendor with a 5.7% share of dollar sales during the four-week period, which includes the company’s Vizzy Hard Seltzer brand.
Earlier this year, Molson Coors settled a false advertising class action lawsuit against Vizzy with a $9.5 million payout for plaintiffs.