The Mexican arm of drinks company Anheuser-Busch InBev (AB InBev) has accused US firm Constellation Brands in a lawsuit filed on Monday February 15 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 February 15, according to a court filing. AB InBev, which confirmed the filing, said that 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 that the licensing arrangement for Corona only extends to beer and does not include hard seltzer.
Constellation said that it is "very surprised" by the development and said that Modelo's claims, including that its seltzer should not be classified as a beer, are without merit and are an attempt to restrain a strong competitor.
It said that it has "fully and completely" complied with the terms of the sub-licence agreement and will vigorously defend its rights.
Constellation launched Corona Hard Seltzer in February of 2020 and said in October that the brand had a 6% share of the US seltzer market, making it the fourth-biggest brand in the segment.
The top spots are held by Mark Anthony Brands' White Claw, Boston Beer's Truly and Anheuser-Busch's Bud Light Seltzer.
AB InBev's US arm, Anheuser-Busch, won on appeal in May in a long-running case against rival Molson Coors over adverts highlighting the use of corn syrup in the Molson Coors' drinks Coors Light and Miller Lite.
A US court also ruled this month that Anheuser-Busch should stop marketing new Michelob Ultra Organic Seltzer as the first and only seltzer certified as organic by the US Department of Agriculture after a challenge from an Oregon-based brewer.