- AB InBev is suing Constellation Brands for allegedly violating a licensing agreement.
- AB InBev acquired Grupo Modelo in 2013 and licensed the Corona beer from the United States to Constellation.
- The lawsuit alleges that Constellation violated the agreement by using ‘Corona’ to harness seltzer.
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The beverage brand that owns Budweiser, Corona and Stella Artois is suing the American brewery Constellation Brands for using the Corona brand on a hard seltzer, according to a lawsuit opened on Monday.
Beverages giant Anheuser-Busch InBev (AB InBev) acquired Corona’s parent company Grupo Modelo in 2013, but U.S. antitrust regulators demanded that it sell the U.S.-based company’s business to Constellation. AB InBev has retained product rights in other markets and the deal has given Constellation the rights to produce Corona and other Modelo brands in the United States.
Grupo Modelo, an AB InBev brand based in Mexico, claims that Constellation violated the agreement by using the Corona brand for a non-beer product, according to court documents analyzed by Insider. Reuters first reported news of the lawsuit, which came amid rising demand for caustic soda in the United States on Monday.
Constellation told Reuters in a statement that the company was “very surprised” by the process and called it an attempt to crush a competitor.
Constellation’s Corona lye was launched in the U.S. in February 2020 and became the fourth largest lye brand, with 6% of the market, the manufacturer said last October. The first three places are in the hands of White Claw (owned by Mike Hardy’s lemonade maker Mark Anthony Brands), Boston Beer Truly and Bud Light Seltzer, owned by Ab InBev and launched in January last year.
White Claw and Truly have a combined market share of 75%, according to data from Nielsen. But the competition is heating up. In 2018, there were 10 brands of caustic soda on the market. In 2020, there were 65, according to Nielsen. In addition to the breweries, brands like Coca-Cola are also entering the market.
AB InBev was sued earlier this month by Suzie’s Brewery Company, based in Oregon, for marketing Michelob ULTRA Hard Seltzer as the “first” and “only” organic hard seltzer on the market. Suzie’s rigid organic Seltzer hit the market last summer, while the Michelob ULTRA rigid Seltzer was launched earlier this year.