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Constellation beats AB InBev in Corona and Modelo seltzer battle

16 March 2023 By Jessica Mason

A jury has found Constellation Brands did not violate its deal with AB InBev’s Grupo Modelo by selling Corona and Modelo hard seltzers.

Yesterday, reports from St. Louis Today outlined how a Manhattan federal jury had accepted Constellation’s argument that its licence to distribute beer bearing Modelo’s brand names also allowed it to sell alcoholic drinks like a Corona Hard Seltzer and Modelo Ranch Water.

Following the hearing, a Constellation spokesperson reinforced that the company was “committed to continuing to operate in accordance with the terms of our sublicense agreement”. However, after the verdict was passed, a Grupo Modelo spokesperson has allegedly suggested that this is not the end of the feud and indicated that his company was disappointed by the result and would be “evaluating all options”.

The court battle began after the two companies had already locked horns over its past Modelo brand disputes. Reports have highlighted how Constellation predecessor company began distributing Modelo’s beers in 1996, then AB InBev sued Constellation in 2021 after alleging its 2020 launch of a Corona hard seltzer breached the licensing agreement and essentially infringed its trademarks. Then, last year, the alcoholic sparkling water brand Modelo Ranch Water was also was added to the high profile Corona hard Seltzer brand battle lawsuit.

As part of its testimony, Constellation told the jury that the drinks are covered by part of its licence that allows it to sell “other versions” of beer or malt beverages under the Modelo brand names – a move that in December led US judge Lewis Kaplan to seek out the contract’s definition of the term “beer” stating that it was too ambiguous to decide the case before trial.

Alongside the dispute, AB InBev has also separately sued Constellation over its Tequila and Bourbon barrel-aged Modelo Reserva beers, in a lawsuit that is still in mediation.