Red Bull settles class action

Updated: 2014-10-15 11:38

By Lian Zi in San Francisco(China Daily USA)

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Red Bull owes you money if you purchased the drink between 2002 and Oct 3, 2014, according to a settlement.

Red Bull faces two consumer class-action lawsuits filed by customers. According to the published documents, plaintiffs allege that Red Bull's marketing and labeling misrepresent both the functionality and safety of Red Bull beverages.

Red Bull responded to the lawsuit in a statement sent to BevNET reading, in part: "Red Bull settled the lawsuit to avoid the cost and distraction of litigation. However, Red Bull maintains that its marketing and labeling have always been truthful and accurate, and denies any and all wrongdoing or liability."

The company recently announced it would refund $13 million in total to consumers to settle the lawsuits. But according to an update on Mail Online, due to the mass amount of claims submitted these days, the settlement is likely to offer each applicant $3, instead of the $10, which was reported earlier in the media.

A customer service representative of Red Bull told China Daily that customers should file claims before March 2015. There will be a hearing on May 1, 2015, to decide whether the settlement will be approved by the court. The money will be refunded within 150 days after the settlement approved, which means that consumers would get their money around Oct 2015.

No proof of purchase is necessary to receive refunds. The offer only applies to customers in the US, according to the representative.

Red Bull dominates the US energy drink market and is also popular in China. Red Bull China, which is a separate company from Red Bull, acquired the rights to sell Red Bull products to Chinese consumers in the early 1990s.

"It has increased sales of the energy drink there to more than $2.5 billion a year with a robust marketing and distribution operation," the New York Times reports.

Even though false advertising class actions are very common in the US, they are probably rarely used or publicized in China, said Thomas T. Chan, partner of Fox Rothschild, a Los Angeles-based law firm.

"Consumer class actions make sure a company does not cheat consumers even for small amounts since the company has to pay huge sums to the consumers and the lawyers to settle the lawsuit," said Chan, adding that consumer class action is a lawsuit in which a plaintiff sues a company on behalf of all consumers.

Chinese business experts suggest that the Chinese government promote a consumer class action law.

"In China, there are lots of exaggerated ads, but customers are not protected because of limited law enforcement," said Zheng Yuhuang, a professor at Tsinghua University.

A consumer class action law could protect customers from being defrauded and promote healthy competition in the market, Zheng said.

(China Daily USA 10/15/2014 page3)