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.
About BBB National Programs: BBB National Programs, a non-profit organization, is the home of U.S. independent industry self-regulation, currently operating more than a dozen globally recognized programs that have been helping enhance consumer trust in business for more than 50 years. These programs provide third-party accountability and dispute resolution services that address existing and emerging industry issues, create a fairer playing field for businesses, and a better experience for consumers. BBB National Programs continues to evolve its work and grow its impact by providing business guidance and fostering best practices in arenas such as advertising, child-and-teen-directed marketing, data privacy, dispute resolution, automobile warranty, technology, and emerging areas. To learn more, visit bbbprograms.org.
About the National Advertising Division: The National Advertising Division (NAD) of BBB National Programs provides independent self-regulation and dispute resolution services, guiding the truthfulness of advertising across the U.S. NAD reviews national advertising in all media and its decisions set consistent standards for advertising truth and accuracy, delivering meaningful protection to consumers and leveling the playing field for business.