Trader Joe’s to Pay $75,000 Penalty for Ad

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 a 1995 Trader Joe’s flier contained misleading information on where the wine was produced.

The settlement, approved Tuesday by Orange County Superior Court Judge Ronald L. Bauer, also prohibits the company from making similar claims in the future. South Pasadena-based Trader Joe’s, which has seven stores in Orange County, admitted 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 appearing 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 in the advertising, she said.

Last year, Trader Joe’s paid a $225,000 penalty to settle a district attorney’s office lawsuit that accused the chain of similar offenses, along with a charge of “false and misleading” price comparisons on wine, Lyman said.

The department launched its most recent investigation after it received a complaint from one of Trader Joe’s competitors about the ad, Lyman said. The district attorney’s office has been negotiating the settlement agreement with Trader Joe’s since December, she said.

The district attorney found no fault with any other ads in the flier and probably would have settled for a smaller penalty than $75,000 had it not been 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.