Red Bull to pay more than US$13 million to settle false advertising lawsuit
Global energy drink company Red Bull GmbH has agreed to pay more than US$13 million to settle a class action lawsuit in the US that alleged the Company falsely advertised its energy drinks.
It has been reported that if the proposed settlement is passed by the court, Red Bull would be required to pay $6.5 million into a settlement fund within seven days.
The settlement could include millions of individuals who purchased at least one Red Bull can over the past 10 years, offering class members the option of a US$10 cash reimbursement or two free Red Bull products with an approximate retail value of US$15 (Red Bull would cover shipping costs).
Red Bull said in a statement that it settled the lawsuit to “avoid the cost and distraction of litigation”.
“However, Red Bull maintains that its marketing and labelling have always been truthful and accurate, and denies any and all wrongdoing and liability,” Red Bull said in the statement.
The plaintiff representing the class, Benjamin Careathers, said he had been drinking Red Bull since 2002. He brought the class action suit in January 16, 2013 in the US District Court for the Southern District of New York, claiming that the Austrian company’s tagline ‘Red Bull gives you wings’ was misleading. The idea that the energy drink would increase performance and concentration, as advertised on the company’s television, online and marketing campaigns, was ‘deceptive’, the suit claimed.
“Such deceptive conduct and practices mean that [Red Bull’s] advertising and marketing is not just ‘puffery,’ but is instead deceptive and fraudulent and is therefore actionable,” the suit said.
The class action cites articles by The New York Times, Nutrition Reviews and the European Food Safety Authority Journal, which claim energy drinks provide their boost through caffeine alone, not guarana or any other ingredient.
The suit said that a 7 oz. cup of drip coffee contains approximately 115 to 175 milligrams of caffeine, depending on the blend, and a 12 oz. serving of Starbucks coffee costs $1.85 and “would contain far more caffeine than a regular serving of Red Bull.” An 8.4 oz. can of Red Bull contains 80 milligrams of caffeine.
“Even though there is a lack of genuine scientific support for a claim that Red Bull branded energy drinks provide any more benefit to a consumer than a cup of coffee, the Red Bull defendants persistently and pervasively market their product as a superior source of ‘energy’ worthy of a premium price over a cup of coffee or other sources of caffeine,” the suit said.
Despite Red Bull’s denial of wrongdoing, the company has voluntarily withdrawn and revised marketing claims challenged in court, according to the plaintiff’s motion.
Plaintiffs David Wolf and Miguel Almaraz made similar allegations in a lawsuit filed in California federal and later transferred to New York.