Costco Faces $5 Million Sugar-Free Labeling Lawsuit

An Illinois customer has filed a proposed class-action lawsuit accusing Costco of misleadingly marketing its Kirkland Signature Hydration Electrolyte Drink Mix as “sugar-free” because allulose, a type of sugar, is listed as its first ingredient. Although the FDA allows manufacturers to leave allulose out of the Total Sugars and Added Sugars figures on Nutrition Facts labels, it still counts as a carbohydrate; a recent federal appeals court ruling has also underscored the distinction between that enforcement guidance and the wording of federal sugar-labeling regulations. The complaint says the broader “sugar-free” marketing misled health-conscious shoppers and cites possible digestive effects of allulose, allegations that have not been established in court. The plaintiff seeks compensation for affected consumers and a court order requiring Costco to stop or correct the disputed labeling.