NAD’s Molson Coors Decision: The Watering Down of the Objective Claim Standard
Last week, NAD released a decision in a case involving a Molson Coors ad that has received more press attention than any NAD decision in recent memory. In the ad, athletes are celebrating the completion of a difficult workout by opening a can labeled “Extremely Light Beer” and pouring the liquid over their heads while an announcer says “Light beer shouldn’t taste like water. It should taste like beer.”
Anheuser-Busch filed a challenge using NAD’s Fast-Track SWIFT process, arguing that the videos falsely disparage Michelob Ultra and other light beers by claiming that consumers find them to taste like water. Molson Coors pointed out that no competitors were named and the tagline was simply “a subjective opinion about what beer should and should not taste like, which cannot be objectively proved or disproved.” In other words, mere puffery “because it is not sufficiently specific and material enough to create expectations in consumers.” But NAD didn’t agree. It deemed Coors’ claim measurable and objective and found it to be unsupported by evidence.
Hmmm. Do consumers really expect Molson Coors to have a well-designed test establishing that some unnamed light beers taste like water? Such jabs have long been a staple of American advertising. Isn’t this akin to Wendy’s iconic “Where’s the beef” campaign? Or Dunkin Donuts’ slogan, “friends don’t let friends drink Starbucks”? These taglines were never controversial. And yet, one can only imagine the conversations that might ensue if these slogans crossed NAD’s desk today. Wendy’s might be asked to provide to-the-millimeter measurements of competitors’ burger-to-bun ratios. And Dunkin might be asked to supply a robust, geographically diverse, well-conducted survey of three hundred “friends.”
Anheuser-Busch is no doubt enjoying its “win” in this case, but this decision sure doesn’t feel like a victory for the advertising industry as a whole. As we’ve noted before, puffery’s protective ambit seems to be shrinking by the day.
So how did NAD justify this decision? It insisted that knocking the taste of a competing product is a support-requiring claim. NAD pointed to its Traeger case. In that case, Traeger, a manufacturer of wood pellet grills, expressly stated that food prepared with propane “tastes like gas” or (to some ears) “tastes like ass” more than one dozen times within the first 30 seconds of the commercial. Express claims. And the evidence in the record demonstrated that virtually all gas grills sold in the U.S. are CSA certified and meet the requirement of ANSI standards mandating complete combustion of the fuel. In other words – food cooked with propane gas is odorless. It does not taste like gas. The express claim was false and targeted at a real, specific segment of the industry: propane grills. Molson Coors, to the contrary, pegs its “water” joke to the imaginary category of “Extremely Light Beer.”
We also have a procedural gripe. NAD’s SWIFT queue has been limited to single, well-defined issues involving express claims that do not require the assessment of complex substantiation. The decision frames the issue as an implied claim, which was outside the scope of a SWIFT challenge (at least until last week’s surprising announcement, without input from interested parties, that the SWIFT scope would be expanded to include implied claims). According to NAD:
The Challenger argued that the videos falsely disparage Michelob Ultra and other light beers by claiming that consumers find them to be tasteless or having a taste similar to water. The Challenger argued that the videos go even further than false disparagement into the realm of ash canning or false denigration by communicating that competing light beers are of little or no value to drink and only good for pouring out of the can to shower oneself as with water.
How is this not an implied claim? The ad does not mention Michelob Ultra or any other light beer; it merely identifies a negative product attribute well-known to beer drinkers – watery taste – which occurs with some beers when they are diluted with water to reduce caloric and alcohol content or are just badly brewed. As an implied claim, this should have been in the Standard Track. Molson Coors would have had time, if it chose to do so, to develop extrinsic evidence to support its contention that no objective claims was being made, after it arrived at the surprising realization that NAD might believe that such evidence would be necessary.
NAD really had to contort itself here to keep this one in the SWIFT queue, asserting that the only issue under consideration is whether the express claim light beer shouldn’t taste like water. It should taste like beer is truthful and accurate. It is no wonder Molson Coors did not attempt to substantiate this “claim” – it is difficult to conceive how you would go about doing it.
Is it possible that “one reasonable interpretation” of the advertisement was the Michelob Ultra tastes like water? Maybe, but we will never know. NAD did not consider the issue. If it did, it seems likely that only an insignificant minority of consumers would take-away that message, and that would mean it is not deceptive.
NAD rightfully looks to standards established by the Federal Trade Commission when it considers whether advertising is truthful and accurate. The “reasonable consumer” standard is codified in the FTC’s Policy Statement on Deception. There, the FTC explains that, for a representation to be deceptive, it must be “likely to mislead reasonable consumers under the circumstances.” The Deception Policy Statement further provides that “[a] representation does not become ‘false and deceptive’ merely because it will be unreasonably understood by an insignificant and unrepresentative segment of the class of persons to whom the representation is addressed.” Rather, the advertisement is deceptive only when at least a “significant minority” of consumers take away a deceptive message.
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The Molson Coors decision will be appealed, so we will see if the current course will be corrected. If not, advertisers will need to anticipate an NAD that is highly suspicious of puffery, willing to find express claims in claims that are implied at best, and ready to accelerate consideration of evidence of meaning under its new SWIFT procedures. All of this suggests a playing field tilted even further against the Advertiser in favor of the Challenger (in 2022, only 1 of 62 competitive challenges at NAD resulted in a finding that the claims at issue were completely substantiated). This could lead Advertisers to consider more fully whether to participate in voluntary industry self-regulation in the first place, which would be an unintended and unfortunate consequence.