On April 3, 2020, U.S. District Judge James Donato dismissed the sugar-related claims in the putative consumer class action lawsuit against O Organics LLC (“O Organics”), a kombucha drink maker owned by Safeway Inc.  In the court’s order, Judge Donato stated that plaintiffs’ counsel would have the opportunity to amend the complaint and offer more than the “glancing” assertions that O Organics’ Kombucha drinks are misleading about their sugar content.  However, Judge Donato noted that the complaint adequately pleads that the labels mislead consumers about their alcohol content.  Plaintiffs claimed that O Organics did not identify its kombucha as an alcoholic beverage even though the products contained more than 0.5% ABV

The complaint alleged that the Kombucha maker mislabeled its Kombucha products as nonalcoholic products when testing showed that the products actually contained up to 2.63% alcohol by volume (ABV), which is above the 0.5% threshold for federal regulation to consider them alcoholic drinks.  According to the Alcohol and Tobacco Tax and Trade Bureau (TTB), “kombucha” generally refers to a fermented beverage produced from a mixture of steeped tea and sugar, combined with a culture of yeast strains and bacteria.  Moreover, the combination of sugar and yeast triggers fermentation, which may produce a kombucha with an alcohol content of 0.5% or more alcohol by volume.  Under federal law, if the alcohol content of kombucha is 0.5% or more alcohol by volume, at any time during production, when bottled, or at any time after bottling, the kombucha is an alcohol beverage and is subject to TTB regulations.  Also, TTB regulations on alcohol beverages apply to any kombucha that has less than 0.5% alcohol by volume when bottled, but the alcohol content increases to 0.5% or more alcohol by volume at any point afterwards as a result of continued fermentation in the bottle.  Any Kombucha product below 0.5% ABV is subject to the U.S. Food and Drug Administration’s jurisdiction.

TTB and FDA have launched investigations into the alcohol content of kombucha in the past, and have found that “many” kombucha drinks in the market were above the ABV threshold.  We will continue to monitor any developments.