What Tequila Brands Should Learn From the 818 Labeling Lawsuit
“100% agave” and “handcrafted” help explain why a tequila costs more. They also give plaintiffs something specific to challenge when laboratory testing or production records appear to contradict the label. The recent 818 tequila ruling suggests that these claims could fuel another wave of the consumer-expectation litigation familiar from “natural” food labeling disputes. Suppliers and wholesalers should pay attention to how their bottles, websites, and sales materials describe both ingredients and production.
The controversy already extends across brands and jurisdictions. Reuters reported the May 2025 suit involving Casamigos and Don Julio, followed by reporting on similar cases in California and Florida and disputed isotope testing. Food & Wine’s March 2026 overview traces related allegations involving Lunazul, Cincoro, and 818. Plaintiffs contend that testing reveals alcohol from non-agave sources despite “100% agave” labels. Diageo vigorously denies adulteration. These reports describe contested claims, not established findings about the contents of those brands.
In Bacos v. Calabasas Beverage Co., LLC, No. 26 C 3706, (N.D. Ill. Oct. 7, 2026), Judge Matthew Kennelly allowed the “100% agave” and “handcrafted” theories to survive dismissal, while rejecting assertions that “small batch” created actionable claims. His analysis turns on what the complaint plausibly alleges. As the opinion explains, the court must “accept all well-pleaded facts in the complaint as true.” That procedural rule does not establish that 818 adulterated its tequila. Id. at *28, *33–38.
The court’s treatment of “100% agave” clarifies a distinction that can get lost in the debate over tequila purity. As the opinion explains, the regulated designation permits certain additives while requiring that “100% of the alcohol in a bottle of tequila was distilled from agave sugars.” Permitted coloring or sweetening therefore does not, by itself, contradict a “100% agave” label. These plaintiffs alleged something different: alcohol derived from non-agave sources. 818’s reliance on Mexico’s regulatory definition could not defeat that allegation at the pleading stage because the alleged substitution, if proven, would violate the very standard the company invoked. Id. at *32–34. The dispute thus centered on whether the plaintiffs sufficiently connected their testing results to the tequila they purchased.
To make that connection, the plaintiffs paired Eurofins isotope testing with allegations that 818’s products shared a distillery and production process. Those allegations supplied a basis for treating the claimed adulteration as a uniform production problem, allowing the court to draw an inference about the plaintiffs’ purchases from testing of other bottles. The court left challenges to chain of custody, lot numbers, and sample selection for later proceedings, describing those details as “evidentiary matters, not pleading requirements.” Id. at *14–19, *29–30. For suppliers, the practical significance extends beyond the laboratory: allegations about a common production process can help plaintiffs carry a challenge from tested samples to a broader product line. Preserving production records and traceable samples gives a brand the evidence to contest that connection, even when objections to the testing cannot secure dismissal at the outset.
Compare Reuters’ October 1 report on Diageo’s dismissal victory. In Pusateri v. Diageo North America, Inc., No. 25-CV-02482, slip op. at 9–10 (E.D.N.Y. Sept. 30, 2026), the court found the five-sample allegations insufficient to support “ubiquitous, systemic mislabeling” and dismissed for lack of standing. The judge in the 818 case expressly distinguished that decision because the plaintiffs in this case had adequately alleged systemic adulteration through their “common origin and common production allegations.” Bacos, at *19 n.4. Neither result resolves the underlying chemistry; the factual allegations connecting tested bottles to consumers’ purchases can change the outcome adn ultimate testing might do that.
In terms of other advertising speak that brands tend to disregard at their periol – “Handcrafted” presents a separate vulnerability. Plaintiffs alleged meaningful human involvement and traditional methods, rather than the fanciful proposition that nobody uses equipment. Considering the alleged production process and 818’s market presence, the court concluded that a consumer could plausibly understand the label to mean “that 818 tequila is not mass-produced.” Id. at *34–36. The practical response starts inside the distillery: identify the manual work, the automated work, and the specific process that supports the claim. Celebrity recognition supplies no substitute for that explanation.
The website offered no automatic cure. 818 argued that online photographs and descriptions disclosed its industrial production. The court declined to place consumers who failed to investigate the website “beyond the protection of consumer protection laws.” Id. at *36–37. The opinion also describes how plaintiffs drew on the same website’s industrial and traditional production descriptions. Id. at *7–9. Review the bottle and website together, including old production stories that may no longer match current operations. A detailed “Our Story” page can supply allegations as readily as explanations.
“Small batch” received different treatment because plaintiffs supplied no measurable standard and relied on facility size and overall output. As the court explained, a producer can make millions of bottles “in many small batches or in a few large ones.” Id. at *37–38. That reasoning supports this dismissal, not a universal exemption for batch claims. A brand that voluntarily advertises a particular batch size gives consumers a concrete factual representation to test. We might call this “puffery” which could also apply to “handcrafted” later based on evidence, but for now, “Small batch” seems out and “handcrafted” seems adequately pled.
Nor did TTB label approval secure dismissal under Illinois’s consumer-fraud safe harbor. The court observed that “nothing in the record indicates that the TTB investigated the challenged representations before issuing 818’s COLAs.” Id. at *41. Preserve the approval, supporting submissions, and evidence substantiating each claim. The decision also leaves an important defense unresolved: on international comity and the act-of-state doctrine, the court stated it would “defer ruling on this issue” pending argument. Id. at *46–47. There are some arguments on this and the abstention issue coming up in November.
Suppliers should begin by asking whether their production records support the claims that help sell the product. Before approving “100% agave” or “handcrafted,” marketing and production teams should agree on what the language communicates and identify the evidence supporting it. For contract-produced tequila, the production agreement should secure access to relevant records and testing, require retention of traceable samples, and allocate responsibility for investigating and defending challenged claims. Changes in the distillery, equipment, or production methods should prompt another review so that established marketing copy continues to describe the actual product. Wholesalers should carry that discipline into their own sales materials by requesting substantiation and using supplier-approved descriptions without embellishment. Turning “100% agave” into “additive-free,” or “handcrafted” into a specific promise about manual production, can introduce a claim the supplier never made or supported.
Those precautions address the same commercial tension that drives “natural” labeling litigation: consumers pay a premium for qualities they understand the seller to promise, then seek recovery when the product allegedly falls short. Although “100% agave” carries specific regulatory meaning, the broader lesson reaches any claim about ingredients, authenticity, or craftsmanship. The 818 ruling shows how those descriptions can draw scrutiny of both the bottle’s contents and the production process behind it. Brands that use such claims to justify a premium should make substantiating them part of the decision to use them.
