Costco Class Action Says Fake Chocolate In Ice Cream Bars

A Costco class action lawsuit claims the wholesale retailer deceptively markets its ice cream bars as having a real chocolate coating.

Plaintiff Catherine Tinelli targets Kirkland Signature Chocolate Almond Dipped Vanilla Ice Cream Bars, sold in boxes of 18 at Costco.

In addition to the product’s name and an image of the product itself, the front of each box pictures chocolate chunks, vanilla beans and almonds.

However, close inspection of the ingredient list on the side of Costco’s product box reveals the coating is not “chocolate” as defined by the U.S. Food and Drug Administration, but rather “milk chocolate flavored coating” containing coconut and soy oils, according to the Costco class action lawsuit.

Under FDA standards, companies may market their products as “chocolate” based on a mixture of chocolate liquor, dairy ingredients, sweeteners and flavorings. Those standards specifically prohibit the use of other ingredients, such as the vegetable oils found in the coating of Costco’s ice cream bars.

“It is false, deceptive and misleading to represent the Product as being made with chocolate without disclosing the addition of coconut oil and soybean oil, ingredients which are prohibited in chocolate. Where a coating contains chocolate and non-cacao fats like vegetable oils or vegetable fats, standards of identity for cacao products require this fact be disclosed in its name,” states the Costco class action lawsuit.

The Costco class action lawsuit cites FDA federal regulations stating that the correct nomenclature would be “milk chocolate and vegetable fat coating” or “skim milk chocolate and vegetable fat coating,” as appropriate.

“Alternatively, the common or usual name of the vegetable derived fat ingredient may be used in the name of the food, e.g., ‘milk chocolate and ___ oil coating,’ the blank being filled in with the common or usual name of the specific vegetable fat used.”

Therefore, “an accurate and non-misleading name for the ‘chocolate’ promoted on the front label (and falsely described on the ingredient list) would be ‘milk chocolate and coconut and soybean oil coating,’” states the Costco class action lawsuit.

Chocolate coatings can be problematic on prepackaged frozen desserts because cacao fat has a higher melting point than ice cream, the filing states. For that reason, many companies use coatings that imitate real chocolate, but have a lower melting point.

“Consumers are not aware of the differences in composition of these coatings, because they are sold as such only to manufacturers of such desserts under such terms as ‘Ice Cream Coating,’ ‘Paddle Pop Paste’ and other similar designations, which fails to identify the product for what it is or differentiates it from other chocolate products which it resembles,” the Costco ice cream bar class action states.

The Costco class action lawsuit cites decreased quality in taste, creaminess and satiety for such “cheaper imitations” of chocolate. It also states that Class Members would not have purchased this product – or would not have paid the premium price Costco charges for it – if they had known about the actual ingredients.

The FDA standards “gave consumers confidence that what was on the front label conformed with what was inside, not requiring the average, hurried shopper to apply a magnifying glass to every inch of the package,” the filing notes.

In addition to negligent misrepresentation, the Costco class action lawsuit claims fraud for Costco’s “failure to accurately identify the Product on the front labels, when it knew its statements were neither true nor accurate. Plaintiff and Class Members would not have purchased the Product or paid as much if the true facts had been known, suffering damages.”

It also alleges unjust enrichment, stating that Costco “sold more of the Product and at higher prices than it would have in the absence of this misconduct, resulting in additional profits at the expense of consumers like Plaintiff.”

Costco is based in Washington state, but the Costco class action lawsuit was filed in U.S. District Court, Southern District of New York.

Tinelli and many putative Class Members reside within that district, and Costco does considerable business there, according to the filing.

The Costco class action lawsuit demands a jury trial. Potential Class Members are seeking monetary damages, plus costs and expenses to be paid by Costco. In addition, they are asking that Costco be directed to correct the marketing and labeling of its ice cream bars to comply with the law.

Plaintiffs’ counsel is Spencer Sheehan of Sheehan & Associates PC.

The Costco Ice Cream Bars Class Action Lawsuit is Catherine Tinelli, et al. v. Costco Wholesale Corp., Case No. 1:20-cv-02983, in the U.S. District Court for the Southern District of New York.

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