AB InBev sues Constellation in US over misuse of Corona brand name

Anheuser-Busch InBev's Mexican arm Grupo Modelo sued U.S. firm Constellation Brands for breaching a deal on the use of the Corona brand name by applying it to a non-beer product.

Constellation has used the name for sparkling water with alcohol and flavoring dubbed Corona Hard Seltzer, one of the very popular seltzer drinks in the US.

The suit was filed in the US district court of the southern district of New York on Monday after AB InBev was unable to settle the matter directly with Constellation.

When AB InBev took full control of Grupo Modelo in 2013, it sold Grupo Modelo’s business in the US to Constellation, including the Corona brand.

But the licensing arrangement for Corona was only for beer and not for hard seltzer.

AB InBev kept rights to the Modelo brands, including Corona, in Mexico and elsewhere.

Constellation said it had “fully and completely” complied with the terms of the sub-license agreement and would vigorously defend its rights. It added that Modelo’s claims that its seltzer should not be classified as a beer were without merit and an attempt to restrain a strong competitor.

Constellation launched Corona Hard Seltzer in February 2020 and said in October the brand had a 6% share of the U.S. seltzer market, making it the fourth-biggest brand in the segment.