Jury to Decide the Definition of Beer in Corona Lawsuit According to a Federal Judge

Constellation Brands, maker of popular Mexican beers Corona, Modello and Pacifico. (Photo: Justin Sullivan/Getty Images)

On Tuesday a Manhattan federal judge rejected Anheuser-Busch Inbev SA’s Grupo Modelo request to hold Constellation Brands Inc (CBI) liable. AB Inbev argues that CBI is selling Corona-branded hard seltzer without its permission. The Corona lawsuit is now set up to go to a jury.

As previously reported, AB InBev, the company most famously behind Budweiser, acquired Grupo Modelo in 2013. However, US antitrust regulations required the Corona, Modelo and Pacifico brands to be licensed to another firm, Constellation Brands. This action was meant to prevent AB InBev, considered the world’s largest brewer, from becoming more of a monopoly. 

Reuter reported that Modelo filed the initial lawsuit last year arguing CBI breached a licensing agreement and infringed on its trademarks. 

The alleged issue began when Constellation started selling hard seltzer with the Corona branding. The terms of the agreement between An InBev and Constellation state they only have the right to use the Corona trademarks on certain beers. 

Now a jury must decide if hard seltzers are considered beer. 

In U.S. District Judge Lewis Kaplan’s ruling, he states: “[The court] recognizes that Modelo has more dictionaries on its side of this debate over the meaning of “beer” than does CBI. But the fact remains that the dictionaries, however, important, do not resolve this case.” 

Kaplan argues that the word beer is ambiguous. Therefore, his judgment sets up a jury trial that could change the definition of beer, at least within contracts and trademark licensing agreements. 

Many hard seltzers are made with malt, which is also the base ingredient for beer. However, Corona USA’s website says its seltzers use “alcohol from sugar” which one could argue makes it a low-alcohol precursor to a rum drink similar to an RTD. 

Many consider hard seltzers a beer alternative because it has lower calories and is often gluten-free. 

CBI will have to do some clever arguing to convince a jury that its product is beer since it is marketed in bold as hard seltzer. 

This case could set new precedents for branding and jurisdiction currently under the Alcohol and Tobacco Tax and Trade Bureau (TTB).

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