A lawsuit filed against Molson Coors’ Vizzy Hard Seltzer is nearing completion, after a federal judge said last week he plans to approve the company’s plan to settle with plaintiffs for $9.5 million.
“Having considered all matters submitted to it at the hearing on the motion and otherwise, including the complete record of this action, and good cause appearing therefore, the court hereby finds that there is a sufficient basis for granting preliminary approval of the settlement agreement,” U.S. district court judge William H. Orrick wrote in a ruling filed last month in advance of last week’s hearing.
Jennifer Marek, a consumer in Menlo Park, California, filed the class action lawsuit in U.S. District Court for the Northern District of California in September 2021. In it, she claimed that Molson Coors used “deceptive and unlawful practices in labeling and marketing its Vizzy Hard Seltzer” by “sprinkling nutrients into a beverage that is lawfully required to disclose harmful health effects.”
Vizzy, which Molson Coors launched in 2020, has touted its inclusion of the “antioxidant vitamin C from acerola superfruit” on its packaging.
The U.S. Department of Treasury’s Alcohol and Tobacco Tax and Trade Bureau (TTB) has long prohibited beverage-alcohol manufacturers from making “any statement related to health,” which “includes statements of a curative or therapeutic nature that, expressly or by implication, suggest a relationship between the consumption of alcohol, malt beverages, or any substance found within the malt beverages, and health benefits of effects on health.” However, because hard seltzers do not contain malt and hops, they fall under the jurisdiction of the Food and Drug Administration (FDA).
Molson Coors has maintained that its marketing of the product wasn’t wrong and compiled with federal and state laws,” according to a Law360 report.
Under the yet-to-be-finalized deal, Molson Coors has agreed to stop using “antioxidant vitamin C from acerola superfruit” on labeling and packaging, but can still highlight acerola cherry as an ingredient and include vitamin C in its nutritional facts panel.
The company will establish a $9.5 million settlement fund that will refund consumers up to $5 per 24-pack, $2 per 12-pack and $0.75 per single-serve can purchased from September 2017 onward, according to Law360.
The settlement includes similar lawsuits that were filed in the Northern District of Illinois, which was dismissed on January 17, and the Southern District of Florida, which was dismissed on January 18. The lead plaintiffs in each case will direct $2.5 million of the settlement fund to attorneys’ fees.
Vizzy accounted for 2.1% of all dollars spent on hard seltzer at off-premise retailers tracked by NielsenIQ in the four weeks ending January 28, according to a report from financial services firm Jefferies. Dollar sales of Vizzy declined -24.2% in that period, compared to the same time last year, and -24.3% in the 12 weeks ending January 28.
Molson Coors’ hard seltzer business accounts for 5.8% of all dollars spent on the segment, with Topo Chico Hard Seltzer edging out its elder sibling at 3.6% of total dollars.
A hearing for final approval of the settlement is scheduled for May 24.