Suit claims Costco's Kirkland tequilas are mixed with low-grade booze
Published in Business News
As shoppers stock their liquor cabinets for the holidays, a new lawsuit alleges that some of Costco's Kirkland-brand tequilas aren't as premium as their labels might suggest.
Some Kirkland tequila brands that claim to contain only alcohol distilled from the blue agave plant actually include other, lesser-quality alcohols, according to a suit filed Friday on behalf of 13 aggrieved tequila drinkers in Washington and eight other states.
Tests found that some of the Kirkland-brand tequilas were so adulterated they didn't even qualify as tequila under Mexican law, according to the suit, which was filed in federal court in Seattle.
The case, which follows similar litigation in other states, drags Costco into a high-spirited, if little known, controversy involving claims of deceptive marketing, duped American consumers and outraged Mexican agave farmers.
This case exposes a high-stakes deception at the heart of the growing and
increasingly popular premium tequila market," declares the suit, which was filed in U.S. District Court by Seattle law firm Hagens Berman.
Questions sent to Costco on Friday afternoon had not received a response by 5 p.m.
Mexican law allows tequila to contain up to 49% alcohol from nonagave sources, such as cane sugar or corn syrup. However, products made from 100% agave command a higher price and are big sellers in the U.S. spirits market.
But some Kirkland brands making that 100% agave declaration fell short, the lawsuit claims.
Tests commissioned by the plaintiffs found up to 40% nonagave alcohol in Kirkland Signature Blanco Tequila, labeled as "100% de Agave" and selling on the Costco website for $31.39 for a 1.75-liter bottle, according to the lawsuit.
Kirkland Reposado ($18.69 for 1-liter bottle) contained up to 95% nonagave alcohol, the suit alleges.
The Kirkland Reposado label states, “This very special Reposado tequila is a blend of tequila rested in American & French oak using 100% Blue Agave. Salud!” according to the suit.
Other Kirkland tequila brands named in the suit are Añejo, which sells for $26.99 a liter, and Extra Añejo, which goes for nearly $55 a liter. A fifth brand named in the suit, Añejo Cristalino, was listed as out of stock Friday.
The suit, brought as a putative class action, claims Costco violated the federal Racketeer Influenced and Corrupt Organizations, or RICO, Act and various state laws, including the Washington state Consumer Protection Act.
The litigation follows January protests by Mexican agave farmers who claimed that some distilleries were cutting their tequila with cane and corn alcohols, according to reports in Mezcalistas.com, a mezcal-focused trade organization.
Some farmers claim adulteration lets distilleries cut costs while still commanding a premium price in markets such as the United States.
Mexican law used to require that all tequila be 100%-agave derived, but began relaxing that requirement after agave shortages in the 1960s, according to Mezcalistas.com. Eventually, the minimum was lowered to 51%, with the nonagave alcohol coming from other sugars added during fermentation.
However, the law requires that tequila with less than 100% agave be labeled as mixto.
By some accounts, nonagave sugars in mixtos affect the taste and viscosity of the tequila and also lead to worse hangovers.
In May, plaintiffs in New York sued the North American division of Diageo, a London-based alcoholic beverage firm, alleging that the company's "flagship" tequilas were "mislabeled as 100% agave," rendering products "illegal in both the United States and Mexico," according to the suit, also brought by Hagens Berman, a global leader in class-action litigation.
Mislabeling is not only unfair to consumers, but also to agave farmers, because it "drives down the price of agave and deprives agave farmers of a share of the profits that they would otherwise receive," Hagens attorney Nathan Tarnor told Mezcalistas.com at the time.
Lawyers for Diageo have challenged the accuracy of the testing process.
In September, similar allegations were raised in a federal suit in California over 818 Tequila, a brand promoted by influencer Kendall Jenner that purports to be a handcrafted, small-batch 100% agave tequila.
In late October, a Florida resident sued Costco over similar allegations around its premium tequila brands.
Hagens Berman also declined to comment on the case, but instead referred to the firm's news release on the case. A Hagens spokesperson said that Friday's suit and last month's suit in Florida appear to be the only two suits so far involving Costco tequila.
The Washington suit filed Friday alleges that Issaquah, Washington-based Costco not only "knowingly" sells adulterated premium tequilas but has "exercised control over, directed, and participated in the operation and management of" what plaintiffs' attorneys refer to as the "Adulterated Tequila Enterprise."
The goal of that enterprise, which includes a distillery and other businesses, is "ensuring that Costco obtained a false certification of Kirkland Tequila Products as '100% de Agave' tequila in order to sell them in the United States at a premium price," the suit claims.
Plaintiffs include two consumers from Washington, who, had they "understood the truth about the nature of Kirkland’s Tequila Products … would not have bought the product or would have paid less for it, the suit claims.
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