Susan Li of FBN on Anheuser-Busch InBev revolving around the strong seltzer as it deals with the drop in beer sales.
The Mexican arm of the beverage company Anheuser-Busch InBev accused the American Constellation Brands in an open lawsuit on Monday of breaking a deal on the use of the Corona brand by applying it to a product other than beer.
Constellation used the name for its Corona Hard Seltzer, a sparkling water with alcohol and flavoring, one of several sparkling drinks that have become very popular in the United States.
The case is the latest in an increasingly competitive and litigious beer market in the United States.
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Grupo Modelo filed a lawsuit in the United States district court for the southern district of New York on Monday, according to a court order. AB InBev, which confirmed the order, said it was unable to resolve the issue directly with Constellation.
When AB InBev took full control of Grupo Modelo in 2013, it agreed with US antitrust regulators to sell Grupo Modelo’s business in the United States to Constellation, including the Corona brand. AB InBev retained the rights to Corona and other Modelo brands in Mexico and elsewhere.
Modelo said Corona’s licensing agreement extended only to beer and did not include the seltzer.
Constellation said it was “very surprised” by the development and said that Modelo’s claims, including that its seltzer should not be classified as beer, were without merit and were an attempt to contain a strong competitor.
He said he had “fully and completely” complied with the terms of the sub-license agreement and would vigorously defend his rights.
Close-up of Corona hard seltzer packaging, a sparkling alcoholic beverage, on store shelves in San Ramon, California, in July 2020. (Photo by Smith Collection / Gado / Getty Images)
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Constellation launched Corona Hard Seltzer in February 2020 and said in October that the brand had a 6% share in the U.S. caustic soda market, making it the fourth largest brand in the segment.
The first places are held by White Claw, from Mark Anthony Brands, Truly, from Boston Beer and Bud Light Seltzer, from Anheuser-Busch.
AB InBev’s US arm, Anheuser-Busch, won the appeal in May in a lengthy lawsuit against rival Molson Coors over advertisements highlighting the use of corn syrup in Molson Coors’ Coors Light and Miller Lite drinks.
A United States court also ruled this month that Anheuser-Busch should stop marketing the new Seltzer Ultra Organic Michelob as the first and only seltzer certified as organic by the United States Department of Agriculture, after a challenge from an Oregon brewery.