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Is a hard seltzer really a beer?
The verdict of a US court was it is a beer, upholding a jury’s decision that Constellation Brands’ Corona and Modelo hard seltzers do not violate the trademark rights of AB InBev’s Mexican subsidiary.
AB InBev purchased Grupo Modelo in 2013 but US competition authorities would only sanction that deal if the world’s biggest brewer forfeited the rights to the Modelo and Corona brands in the US market.
They were bought by Constellation Brands, leaving AB InBev to brew and distribute the brands throughout the rest of the world.
As the hard seltzer category took off, Constellation successfully introduced malt-based hard seltzers under the Modelo and Corona labels.
Modelo sued Constellation in 2021, alleging that Constellation’s Corona Hard Seltzer and Modelo Ranch Water breached a provision of their distribution agreement and infringed its trademarks.
The case centred on how a hard seltzer is defined. Is it a beer or not?
Modelo said their agreement only allowed Constellation to sell beer and malt beverages using Modelo’s branding, while Constellation argued that the agreement’s
definition of “beer” also covered its hard seltzers.
So the case was put to a jury, which last year decided in Constellation’s favour.
Grupo Modelo appealed and during that hearing an exasperated Judge Richard Wesley told lawyers for both sides: “You two have been driving me and my clerks
crazy. Only lawyers can argue about what is the meaning of beer.
“The simple fact of the matter is that the common usage of the word ‘beer’ is separated from this agreement.
“And so be it — you’re big boys and girls, you can do that.”
He also pointed out that the companies’ agreement allowed Constellation to sell the clear alcoholic drink Zima, which he said was “about as much a beer as a Cadillac is
a Volkswagen.”
“They’re both cars, but they’re hellaciously different,” he said.
A spokesperson for Grupo Modelo said that it was disappointed with the appeal court’s decision and “never agreed that Constellation had the right to use our iconic
Corona and Modelo brands for sugar-based seltzers that are clearly not Mexican cervezas.”
Constellation said it was pleased with the decision and looked forward to “putting this issue behind us.”
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