Constellation Brands launched 4.5% ABV Corona Hard Seltzer in the US at the beginning of 2020: hoping to propel the launch with the use of the ‘unbelievably strong brand equity’ enjoyed by brand Corona.
But AB InBev says this breaches its agreement with Constellation Brands on brand Corona.
Constellation Brands gained the rights to the Corona name in the US when AB InBev sold Grupo Modelo’s US business to Constellation in 2013; while AB InBev maintains the rights to the Corona name elsewhere. AB InBev says Constellation only has rights to the Corona name with beer; while Constellation Brands says the launch of Corona Hard Seltzer complies with the license agreement.
The lawsuit comes as big beer's push into the booming hard seltzer category continues.
Corona Hard Seltzer is Constellation Brands’ biggest entry into category: now commanding a 6% market share and representing the fourth largest hard seltzer brand in the US. Other moves in this area include a minority investment in PRESS premium alcohol seltzer and a hard seltzer from Florida craft brewer Funky Buddha.
AB InBev’s hard seltzer portfolio, meanwhile, is led by Bud Light Seltzer, alongside other brands such as Michelob Ultra Organic Hard Seltzer (launched last month) and Bon & Viv and Natty Light Seltzers.
Constellation Brands says it has kept to the terms of the licence agreement and intends to continue to build the Corona Hard Seltzer brand. "While we generally don’t comment in specific detail about matters involving litigation, what we can say is that we’re frankly very surprised by this development," says a statement from the company.
"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. We have fully and completely complied with the terms of our sublicense agreement, including the sublicense agreement’s dispute resolution procedures. We will vigorously defend our rights under our sublicense agreement and applicable law, and we look forward to continuing to build momentum for the Corona Hard Seltzer brand for many years to come."
