AB InBev sues Constellation Brands over use of Corona brand name

Grupo Modelo, AB InBev’s Mexican brewing operation, has taken legal action against Constellation Brands for using the Corona brand name on its hard seltzer.

As reported by Reuters, Grupo Modelo filed its case at the US District Court of the southern district of New York yesterday.

The Mexican brewer has accused Constellation of breaching the terms of a licensing agreement and using the Corona branding on a non-beer product, namely Corona Hard Seltzer, which was launched last year.

A spokesperson for Constellation Brands said the company was “frankly very surprised by this development”.

“We find these claims, including the insinuation that Corona Hard Seltzer should not be classified as beer or a version thereof, to be completely without merit, a blatant attempt to restrain a strong and well-established competitor in a high growth segment of the US beer market, and completely misaligned with general industry and legal standards,” the spokesperson added.

In order to comply with competition rules, when it acquired Grupo Modelo in 2013, AB InBev sold the US rights to Modelo’s beer business as well as the Piedras Negras Brewery in Mexico to Constellation Brands.

By launching its Corona Hard Seltzer, Constellation Brand said it had “fully and completely complied” with the terms of its sub-licence agreement and would “vigorously defend” its rights.

AB InBev, which still owns Corona beer in markets excluding the US, claimed the licensing agreement only extended to Mexican beer. The world’s largest brewer also owns a number of hard seltzer labels, including Bud Light seltzer named after its popular beer brand. Others include Bon & Viv, Natural Light Seltzer and Michelob Ultra Organic Seltzer.

It has recently announced a plan to spend US$1 billion over the next two years to expand production of its hard seltzers.