Costco Accused of Tequila Adulteration in Nationwide Class Action Lawsuit

A Costco store sign is shown in Brampton, Ontario. (Photo: Mike Campbell/NurPhoto via AP)

Seattle-based consumer law firm Hagens Berman has filed a class action lawsuit against Costco, accusing the popular wholesaler of selling adulterated tequila under the Kirkland brand name.

On Friday, the law firm filed a RICO case in Washington federal court on behalf of 13 plaintiffs who allege to have bought Kirkland Signature Tequila over the past few years. The suit alleges that Costco falsely and knowingly mislabeled its products as “100% de Agave,” despite the fact that laboratory testing has supposedly proved otherwise.

Plaintiffs claim to have commissioned a lab test of Costco’s tequilas using a technique called carbon isotope ratio analysis, which identifies the plant origin of ethanol in a spirit. According to the test results cited in the lawsuit, Kirkland Blanco contained between 60% and 80% agave-derived ethanol, while Kirkland Reposado contained between 5% and 25%. It is unclear whether Kirkland’s other tequila products — its Añejo, Extra Añejo and Cristalino — were submitted for testing.

Hagens Berman has filed a nationwide class action that could theoretically pay out to millions of consumers who purchased Kirkland Signature Tequila. The firm has also accused Costco of violating the RICO act, alleging that the company engaged in mail fraud and wire fraud “for the purpose of executing the unlawful scheme.”

“We believe Costco’s marketing of its tequila products is two-faced, and that despite marketing it as a premium – and reflecting that in its price – consumers have been misled about the quality of Kirkland Signature,” Steve Berman, managing partner and co-founder of Hagens Berman, said in a statement. “Consumers who purchased Kirkland tequila didn’t get what they paid for, plain and simple.”

Like most Kirkland products, Kirkland Signature Tequila is not produced at a Costco-owned facility, but rather by a contracted third party. The brand’s tequila has switched between at least four different distilleries since its inception, and is currently produced at Corporativo Destileria Santa Lucia in Tesitán, Jalisco, according to records.

Costco Wholesale Corporation and Corporativo Destileria Santa Lucia have yet to publicly respond to the lawsuit.

The allegations are the latest in a wave of legal action accusing tequila producers of adulteration. The floodgates opened in May when Diageo, owner of Casamigos and Don Julio Tequila, was accusing in New York court of mislabeling its products. Since then, Michael Jordan’s Cincoro Tequila, Kendall Jenner’s 818 and Heaven Hill’s Lunazul have been named in separate suits, all of which purport to have used laboratory testing.

The claims have been vigorously denied by Diageo, the Tequila Regulatory Council (CRT) and the Mexican Chamber of the Tequila Industry. In an email shared with The Daily Pour last month, CNIT general director Ana Cristina Villalpando Fonseca insisted the CRT is the only organization that holds the legal authority and technical capacity to issue official determinations on adulteration.

“We acknowledge that in every industry it is valid to promote oversight and continuous improvement,” Fonseca wrote. “Yet, accusations without technical foundation or documentary support unjustly harm the reputation of a sector that has built its prestige through transparency and collective effort.”