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Battle Brews Over Kombucha Teas

Battle Brews Over Kombucha Teas

Regulator says the bubbly drink violates U.S. limits on alcohol content


Wall Street Journal

By Mike Esterl

November 9, 2015

A fermented tea called kombucha recently became one of America’s fastest-growing bottled drinks even though it tastes a lot like vinegar and can sport tendrils of live cultures that resemble jellyfish.


But the U.S. government is worried there may be too much of something else in the cloudy, carbonated brew: booze.


Federal regulators have fired off warning letters in recent weeks to some kombucha producers after finding alcohol levels above one-half of 1%, the U.S. dividing line between alcoholic and nonalcoholic drinks.


Two consumer complaints seeking class action status also were filed last month in California claiming deceptive practices in alcohol-content labeling by industry leader Millennium Products Inc., the maker of GT’s Enlightened and Synergy brands. One of the lawsuits allege alcohol levels of up to 3.8% compared with about 5% in beer.


Millennium and others dispute the government’s and the lawsuits’ alcohol-content allegations, and say the government’s method of testing is flawed. Millennium says its drinks’ alcohol content is below the U.S. limit for labeling alcoholic drinks.


“Nobody’s saying, ‘let me get a six-pack of kombucha and get wasted tonight,’ ’’ said Hannah Crum, president of Kombucha Brewers International, a trade group that represents dozens of producers.


Authorities say it is not about getting punch drunk but about enforcing warning labels, minimum age requirements, special taxes and other regulations governing alcoholic beverages.


“There are people who can’t drink [alcohol] for religious or health reasons. Folks deserve to know what they’re drinking,’’ said Thomas Hogue, a spokesman at the Alcohol and Tobacco Tax and Trade Bureau, which sent out the warning letters.


Bill Moses, chief executive of California-based kombucha brewer KeVita Inc., said his company hasn’t received a warning letter and keeps the alcohol in its drink below one-half of 1% by filtering out most of the yeast. But he says a close friend and recovering alcoholic fell out of sobriety after drinking another company’s kombucha.


“If this category is going to grow from toddler to grown up, it has got to provide transparency” in labeling, he added.


Whole Foods Market Inc. briefly removed kombucha from its stores in 2010 following concerns about alcohol levels.


This time there is more at stake. U.S. carbonated teas, of which kombucha is the largest component, totaled $529 million in sales last year, up from $128 million in 2009, according to industry tracker Euromonitor International. Grocery chains includingKroger Co. and Publix Super Markets Inc. now sell it.


Kombucha brewing dates back centuries in countries like China and Russia. It is produced by adding a pancake-shaped, rubber-like culture of bacteria and yeast to tea and sugar. The fermentation produces organic acids, antioxidants and vitamins that fans claim benefit the immune system. Its health benefits haven’t been scientifically proven.


“I drink one of them and I don’t crave a bunch of sweets,’’ said Ciana Ferden, a 22-year-old engineering student at Georgia Institute of Technology who started drinking kombucha a couple of years ago to combat indigestion.


Kombucha produces alcohol through fermentation. The fermentation can continue after the beverage is shipped, sometimes even causing bottles to explode. Pasteurization is one easy solution, but producers say the cultures must remain alive to deliver purported health benefits.


“It would defeat the purpose. You might as well make carbonated soda,’’ said G.T. Dave,Millennium’s founder, who started brewing kombucha in his family’s Los Angeles kitchen in 1995 as a 15-year-old. He casts the drink as an elixir, saying others see disease “as an imbalance” in the body and use kombucha to help “restore that balance.”


Mr. Dave said Millennium tweaked its fermentation in 2010 to keep alcohol levels in its Enlightened and Synergy brands below the government’s level requiring alcohol content labeling. In the company’s Classic brand, which is sold as a registered alcoholic beverage with warning labels, the level ranges between a quarter of 1% and 1% he added.


He wouldn’t say whether Millennium received a TTB warning letter but confirmed getting a “reminder letter’’ about alcohol laws. In 2006, Millennium agreed to pay a $2,500 fine to settle a dispute with the TTB over its alcohol labeling.


Mr. Hogue, the TTB spokesman, declined to say which companies received the warning letters. Companies can be fined up to $11,000 a day for exceeding the alcohol limit, he added, but the regulator’s goal is to resolve issues by bringing products into compliance.


The Kombucha brewers trade group contests the government’s decades-old method of measuring density to calculate the alcohol level. Because the acids in kombucha are so similar in density to alcohol, the method produces inaccurately high readings, they argue. Newer methods like those for measuring alcohol in blood are more reliable and show their products are below the government maximum for nonalcoholic beverages, they say.


Industry supporters include Rep. Jared Polis (D., Colo.), who stocks his Capitol Hill refrigerator with kombucha and in September wrote a letter to the TTB questioning the alcohol-test results. Regulating the tea like beer is “absurd federal overreach,’’ he said in an interview.


The TTB said its testing methods are reliable but that it would accept alternative methods if the industry can show “consistently reliable, accurate and reproducible’’ results. The brewers’ association said it is working on validating the process.