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Case Study On Ethical Issues of Red Bull

Red Bull was founded in 1987 and gained popularity with its slogan "Red Bull gives you wings" promising increased performance. In 2013, Benjamin Careathers filed a class action lawsuit against Red Bull claiming its marketing claims were misleading and not backed by scientific evidence. The Southern District Court of New York ruled Red Bull's advertising was deceptive. Red Bull settled for $13 million, providing $10-15 per consumer who purchased Red Bull since 2002. Red Bull maintained its labels were truthful but would ensure future claims are scientifically supported.

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1K views2 pages

Case Study On Ethical Issues of Red Bull

Red Bull was founded in 1987 and gained popularity with its slogan "Red Bull gives you wings" promising increased performance. In 2013, Benjamin Careathers filed a class action lawsuit against Red Bull claiming its marketing claims were misleading and not backed by scientific evidence. The Southern District Court of New York ruled Red Bull's advertising was deceptive. Red Bull settled for $13 million, providing $10-15 per consumer who purchased Red Bull since 2002. Red Bull maintained its labels were truthful but would ensure future claims are scientifically supported.

Uploaded by

darshini gupta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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CASE STUDY ON ETHICAL

ISSUES OF:
RED BULL
 In 1987, the Red Bull energy drink company was founded in Austria. The energy
drink gained popularity over the years and by 1997 Red Bull was available in 25
markets globally including Western and Eastern European, New Zealand, India
and South Africa and since then it has been under continuous scrutiny of
controversies.

 In 2000, Red Bull released its first advertisement with the slogan: “Red Bull
gives you wings.” One of the most famous controversies related with red bull is
the one associated with this slogan. Red Bull's ad campaign promised that the
drink will increase performance, concentration and reaction speed thus “giving
you wings”.
 A man named Benjamin Careathers, along with many other consumers of the
Red Bull products joined forces and filed a law suit against Red Bull on January
16th 2013.
 The plaintiffs claimed that Red Bull’s marketing and advertising was misleading
to the public. The claims by Red Bull to “give you wings” are false. The
consumers also claimed that there were no scientific facts to back up Red Bull’s
claims for improved performance, concentration and reaction speed.
 “Red Bull's ad campaign allowed the company to charge and get a substantial
premium for their products over readily available and much lower priced sources
of caffeine that provide the same results”, the suit said.“The allegedly
misleading ads were intended to induce unsuspecting consumers into purchasing,
at a premium price, millions of dollars worth of Red Bull energy drinks”.
 The case was handled in the Southern New York District Court. The suit
concluded that, “Such deceptive conduct and practices mean that [Red Bull’s]
advertising and marketing is not just ‘puffery,’ but is instead deceptive and
fraudulent and is therefore actionable.” 
 Red Bull proposed a settlement for $13,000,000 in favor of the consumers.
Anyone who has purchased or drank a Red Bull since 2002 was eligible
to receive $10 in cash or $15 in Red Bull products. No proof of purchase was
necessary.
 After settling, Red Bull released the statement:“Red Bull settled the lawsuit to
avoid the cost and distraction of litigation. However, Red Bull maintains that its
marketing and labeling have always been truthful and accurate, and denies any
and all wrongdoing or liability, it also confirms that all future claims about the
functional benefits of its products will be medically and/or scientifically
supported.”
 Red bull should have understood the importance of ethics in doing business.
They should not have made claims regarding the improved performance,
concentration and reaction speed without having scientific data to back it up.
They should have also thought of the public’s interest instead of just their
personal gain and selfish interest. There was also the problem of competitive
pressure on profits. Needing the power over the market made red bull make false
claims by going against the ethics of business thus creating issues.

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