Trader Joe’s to Pay $75,000 to Settle Ad Suit

Specialty grocer Trader Joe’s Co. has agreed to pay a $75,000 penalty to settle accusations that it published misleading advertising, the Orange County district attorney’s office said Tuesday.

The district attorney claimed in a lawsuit filed this week that a wine advertisement in one of Trader Joe’s brochures contained misleading information.

The settlement approved Tuesday by Orange County Superior Court Judge Ronald L. Bauer also prohibits the company from making similar claims in the future. Trader Joe’s, which has seven stores in Orange County, admits no wrongdoing, Deputy Dist. Atty. Michelle Lyman said.

Trader Joe’s executives could not be reached for comment.

The ad in Trader Joe’s 24-page Holiday Fearless Flyer booklet last year implied that two wines with Plam Vineyards labels were being produced at the winery when, in fact, the wines had been produced elsewhere, Lyman said.

A company is allowed to put its label on a wine that it does not produce, Lyman said, but the advertising was misleading. Plam was not involved with the advertising, she said.

Last year, Trader Joe’s paid a $225,000 penalty after the district attorney’s office made a similar allegation against the South Pasadena-based chain. The previous lawsuit also accused Trader Joe’s of making “false and misleading” price comparisons on wine, Lyman said. Trader Joe’s also admitted no wrongdoing in that case.

The department launched its most recent investigation after receiving a complaint about the ad from one of Trader Joe’s competitors, Lyman said.

The district attorney found no fault with any other ads in the brochure, and probably would have settled for a smaller penalty than $75,000 were it not for the previous complaint against the chain, Lyman said.

“We felt they had adequate warning and needed to really make sure that their ads were truthful,” she said.