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(Courtesy Constellation Brands)
On Monday AB InBev-owned Grupo Modelo filed a Federal lawsuit alleging that US drinks giant Constellation Brands had breached its deal with the company when it extended the Corona brand name to Corona Hard Seltzer, which the Victor, NY-based beer, wine and spirits producer introduced last year.
“When AB InBev took full control of Grupo Modelo in 2013, it agreed with U.S. antitrust regulators to sell Grupo Modelo’s business in the United States to Constellation, including the Corona brand according to the ST Louis Post-Dispatch. “AB InBev retained rights to Corona and other Modelo brands in Mexico and elsewhere.”
That deal was a godsend for Constellation Brands. In 2020 the Corona Brand family was the fourth best-selling brand in the US according to the Drinks Trade, generating $1.684 billion for the company.
So it’s understandable that Constellation would want to extend the Corona Name into the uber-hot hard seltzer sector. But Anheuser-Busch’s Mexican arm is having none of it.
The majority of hard seltzer are produced from either a brewed-malt (“clear malt”) or brewed-sugar (where 100% of the fermentables are derived from non-malt sugar) base, with carbonated water and added flavor.
Under Alcohol and Tobacco Tax and Trade Bureau (TTB) regulations, both malt- and sugar-based hard seltzers are considered “beer.”
Responding to the February 15th filing, which was made in the U.S. district court of the southern district of New York,
Constellation said it had “fully and completely” complied with the terms of the sub-license agreement and would vigorously defend its rights and that AB InBev’s argument that seltzer should not be classified as a beer, were meritless and an attempt to restrain a strong competitor.
According to US News Corona Hard Seltzer which launched in February 2020, has “a 6% share of the US seltzer market, making it the fourth-biggest brand in the segment,” behind “Mark Anthony Brands’ White Claw, Boston Beer’s Truly and Anheuser-Busch’s Bud Light Seltzer.”
