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The Odd Case of Not Enough Ginger in Ginger Ale

by: The Knowledge Group

November 19, 2020

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One of the hurdles any product manufacturer must always overcome, especially in the food industry, involves meeting at least a minimum content quantity and quality of what is advertised in that product. Canada Dry found itself facing this challenge when it was sued two years ago for false claims and misrepresentation of its flagship food product, Canada Dry Ginger Ale. The lawsuit alleged that the product, which advertised itself as including real ginger ingredients, was falsely sold and had no such ginger at all.

Cooking Out the Substance of the Matter

In reality, Canada Dry’s production process converts ginger into ethanol, which essentially destroys any nutritional aspect of the ingredient by the time its drink is finished and ready to be packaged and sold to consumers. The drink company finally decided after a year and half of legalities to just settle the matter and pay the claimant $200,000 in damages. While the Canadian settlement let Canada Dry avoid changing anything about its product, it wasn’t so lucky on the U.S. side of the border, having to drop its logo statement, “made from real ginger.”

For a company the size of Canada Dry, the settlement itself was not a big hit and was likely cheaper in the long run than the cost of continuing the litigation to the court. However, for the claimant and legal representation, the costs were split $100,000 for the legal representation, $1,500 each for the two claimants, and the remainder went to a legal non-profit help organization.

Americans Don’t Do it Better

As for the U.S. case, also filed in August 2018, the settlement reward, in that case, was not as lucrative. Instead, the settlement ended up forcing the company, as mentioned above, to lose its logo statement, and provide a small dollar settlement to each household claiming it was damaged. If one actually kept their receipts showing purchase, that household would receive a $40 one-time recovery. If no paperwork, the household would only receive $5.20, the cost of a six-pack before markup and taxes probably. As a result, the entire matter proved yet again, life might be better north of the border.

Note: The Knowledge Group continuously produces webcasts on this topic and other hot-buttons issues relating to commercial/consumer law to keep you ahead of the curve.

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