Can New York Restaurants Face Legal Consequences for “Ketchup Fraud?”

(DISCLAIMER: I am not and do not claim to be a law expert. This is not legal advise. Please speak with a legal official for proper consultation)

I saw on Facebook how Heinz Ketchup has been trying to cut down on "ketchup fraud" by using a special color coding to ensure you are receiving Heinz at a restaurant, instead of a cheaper alternative being passed as Heinz. So that begs the question, can restaurants, such as those in the Hudson Valley, get in trouble for passing off cheaper brands of ketchup as a major named-brand like Heinz? Would this count as false advertising? Would this lead to issues with inaccurately displaying ingredients? Could Heinz sue the restaurant for defamation?

Most restaurant patrons expect to have Heinz with their meals. Almost nine out of 10 restaurants offer Heinz ketchup, according to H.J. Heinz Co. of Pittsburgh, which has a 54 percent share of the U.S. ketchup market and sells about 650-million bottles worldwide annually.

Can Restaurants Be Sued For Not Stating Ingredients in Condiments?

To prevail in a lawsuit, a consumer must show that the failure to warn caused an injury resulting in damages or losses that can be measured in terms of money. A consumer can also pursue a class action lawsuit, which is an alternative to an individual lawsuit.

So yes, consumers may be able to sue a company for not providing an adequate label, including when a restaurant doesn't list ingredients in condiments. However, there are some exceptions to the requirements for listing ingredients:

• Food made to order
  • Restaurants, cafes, and food carts that make food to order are not required to provide ingredient lists or allergy warnings.

• Incidental additives
  • Some ingredients are exempt from the requirement to be listed, such as incidental additives.

• Condiments and other items for general use
  • Condiments and other items placed on the table or counter for general use are not required to have their calorie content displayed.

So where do things stand when it comes to refilling ketchup? It's not illegal to refill ketchup. In fact it used to be very common to do. Health inspectors don't care so long as the stuff in the bottle isn't breeding bacteria. The high vinegar content in all ketchups usually takes care of that problem.

What would be illegal is to buy bottles of Heinz use them up and then refill them with some other cheaper ketchup to save a couple bucks. After a survey of restaurants in the US, it says that about 20% admit refilling ketchup bottles, usually to save money.

When Can a Company Sue for Defamation?

There are several essential elements of a Business defamation claim. Foremost, for a claim to survive, the statement must be demonstrably false. Truth is an absolute defense against defamation allegations.

The second pivotal component involves disseminating these false statements to a third party. Finally, the linchpin of a Business defamation claim is establishing a clear link between the false statements and a tangible financial loss suffered by the aggrieved Business. Proving this cause-and-effect relationship is critical, as it substantiates that any harm endured by the company is a direct consequence of the disseminated lies.

The process of proving financial loss requires a meticulous examination of the Business’s operations, often requiring proof of lost profits or opportunities because of the defamatory statement.

Can a Restaurant Be Sued for False Advertising?

• The defendant made false or misleading statements about their products
• The deception was likely to influence the plaintiff's purchasing decision
• The advertised goods were sold in interstate commerce
• The plaintiff was likely to be injured by the deception

I think, at the end of the day, yes, a Hudson Valley restaurant could potentially get in trouble for marketing their ketchup as Heinz or another name brand while they are refilling the bottles with a cheaper alternative. Though it may be possible, it may not necessarily be probable.

Someone may be able to bring this to court, sure, but there is no guarantee it would even work. If it does ever go to court, it could certainly cause any Business plenty of headaches simply navigating the legal proceedings and money it all costs, win or lose. To be safe, Hudson Valley restaurants, be very clear and honest with what you are serving.