Artisan Spirit: Fall 2021

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FTC’s guidance is that in order to avoid making misleading claims, businesses need to be specific and substantiate their statements. They need to do so by having scientific information to confirm their claims. Businesses also need to use sufficient qualifications and disclosures to prevent misleading reasonable consumers. Beyond the FTC’s regulations, many states have their own laws that are more protective or cover different types of advertising claims. By way of example, California is far stricter on “compostable” and “biodegradability” claims, essentially banning those terms for most marketing. For example, let’s say you advertise carbon reduction efforts such as “we offset our carbon emissions by purchasing renewable energy.” That claim would be too broad. To withstand legal scrutiny, among other things, that claim would need to specify what component of your operations you’re referring to (e.g., Scope 1 direct emissions, Scope 2 electricity consumption, or Scope 3 indirect emissions), as well as how much of such emissions are being “offset.” Without those qualifications and disclosures, the implication may be that you offset each and every ton of carbon dioxide equivalent emissions associated with your product, which likely is not the case. What’s more, you would need to have documents that show a scientifically accurate and reliable method of calculating your carbon emissions in the first place. In short, there are significant risks to thoughtless green marketing. But, going green is not only good on its own; customers also increasingly want to know if your business is environmentally sound. So, if you’re going to make eco-friendly claims, take the time to do your research and get it right. DISCLAIMER: This article is intended to be a source of general information, not an opinion or legal advice on any specific situation, and does not create an attorney-client relationship with our readers.

Bao M. Vu is a Partner with the law firm Stoel Rives LLP. He regularly advises clients on compliance with complex consumer protection and environmental statutes and regulations. He can be reached at bao.vu@stoel.com or 415-500-6572. Corey Day is an alcohol beverage attorney and litigator at Stoel Rives LLP (stoel.com). He likes chatting about potent potables, so email him: corey.day@stoel.com; call him: 916-319-4670; or follow him on twitter: @coreyday.

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