AB InBev takes Constellation to US court over Corona brand name

The Mexican arm of drinks company Anheuser-Busch InBev accused US firm Constellation Brands in a lawsuit filed on Monday (Feb 14) of breaching a deal on the use of the Corona brand name by applying it to a product other than beer.

Constellation has used the name for its Corona Hard Seltzer, a sparkling water with alcohol and flavouring, one of several seltzer drinks that have become very popular in the United States.

The case is the latest in an increasingly competitive and litigious US brewing market.

Grupo Modelo filed its suit in the US district court of the southern district of New York on Monday, according to a court filing. AB InBev, which confirmed the filing, said it had failed to settle the matter with Constellation directly.

When AB InBev took full control of Grupo Modelo in 2013, it agreed with US 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.

Modelo said the licensing arrangement for Corona only extended to beer and did not include hard seltzer.

Constellation said it was "very surprised" by the development and said Modelo's claims, including that its seltzer should not be classified as a beer, were without merit and were an attempt to restrain a strong competitor.

It said it had "fully and completely" complied with the terms of the sub-licence agreement and would vigorously defend its rights.

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