Grupo Modelo, a subsidiary of Anheuser-Busch InBev has filed a lawsuit against Constellation Brands claiming that Constellation’s use of Corona Seltzer has breached their deal on the use of the Corona brand name by applying it to a product other than beer.
This will be an interesting case to watch because the outcome may depend on how the court views the definition of beer versus hard seltzer. Constellation was allowed to use the name Corona in the U.S. only for beer. Many states are currently struggling with how to regulate hard seltzers since they defy the definition of beer in many state statutes. Oregon just recently issued new guidelines for hard seltzer.
When AB InBev took full control of Grupo Modelo in 2013, it agreed with U.S. antitrust regulators to sell Grupo Modelo’s business in the United States to Constellation, including the Corona brand. AB InBev retained rights to Corona and other Modelo brands in Mexico and elsewhere.
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