National Advertising Division Refers Bacardi’s Claims for Havana Club Rum to FTC for Review and Possible Enforcement Action
New York, NY – May 17, 2023 – In a challenge brought by Pernod Ricard, USA LLC, the National Advertising Division (NAD) of BBB National Programs has referred advertising claims made by Bacardi USA for its Havana Club rum to the Federal Trade Commission (FTC) after the company informed NAD that it would not participate in the NAD self-regulatory process with respect to the challenged claims.
Pernod Ricard challenged express and implied claims for Bacardi’s Havana Club brand rum, contending that use of the name “Havana Club” for rum that is made in Puerto Rico, in conjunction with labeling and advertisements that associate the rum with Cuba, misleads consumers about the origin of the rum.
As an initial matter, NAD considered Bacardi’s request that the case be administratively closed under NAD’s Procedures that provide for closure when the advertising claims are the subject of pending litigation or an order by a court, or when the proceeding does not warrant the expenditure of NAD’s resources. NAD determined that it retained jurisdiction to review the challenged claims.
Upon receiving the determination that NAD would not administratively close the matter, Bacardi informed NAD that it would not participate in NAD’s self-regulatory process.
Bacardi advised NAD that it would permanently discontinue the use of the challenged hang tags and revise in-store promotional materials, however, NAD determined that these changes do not address all advertising claims challenged by Pernod Ricard.
Self-regulatory review of the advertising claims challenged in this case could have provided benefits to both consumers and fair competition.
Considering Bacardi’s decision to not participate in the NAD self-regulatory process, NAD has referred the matter to the FTC for review and possible enforcement action.
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