Group sues Wal-Mart for incorrect "organic" labels on products

An activist group that represents smaller farmers has sued Wal-Mart, saying that Wal-Mart Stores, Inc. (NYSE:WMT) has incorrectly labeled several products as organic. This lawsuit was reported in The Washington Post today as the complaint was presented to the U.S. Department of Agriculture (USDA).

Called "Cornucopia," the group sent its complaint to the National Organic Program, a division of the USDA, and in it stated that at several Wal-Mart stores the retailer had incorrectly labeled Stonyfield Farm's all-natural yogurt as organic.

Stonyfield Farm is one of the largest purveyors of all-natural yogurt in the world, but has struggled under the load of growing organic popularity and has had to make adjustments to its business model to skill keep natural ingredients in the product. Now it is no longer considered "100% organic."

The lawsuit filed by Cornucopia also said that several Wal-Mart stores had included non-organic products such as tofu, egg-roll wrappers, and juice in a cooler designated for organic produce -- which could cause customer confusion with all-organic products. A Wal-Mart spokeswoman responded in an email that "it's hard to take their claims seriously" and said that one of the group's founders, Mark Kastel, had worked for a Wal-Mart rival.

But so what? Wal-Mart needs to determine if the claims are valid and address them if they are -- but stating something that has no relevance to the lawsuit's claim does nothing for nobody. Wal-Mart may be correct here, as may be Cornucopia. If the lawsuit cannot prove the claims it brings up in the lawsuit, then Wal-Mart can pounce. Not until then, though.