Is hard seltzer a ‘beer’? Jury says “yes” in Corona case

USA | In a case that revolved around the definition of “beer”, a federal jury ruled that the third-ranking US brewer, Constellation Brands, can continue to sell Corona and Modelo hard seltzers in the United States.

In February 2021, AB-InBev and its Mexican unit, Modelo, had dragged Constellation to court, claiming that Constellation had violated a licensing agreement pertaining to the use of the Corona brand name.

AB-InBev argued that Constellation’s license to use the Corona label only applied to beer. In AB-InBev’s eyes, Constellation had breached the agreement when it produced and distributed its hard seltzer line as of 2020. AB-InBev sought to force Constellation to halt sales of Corona Hard Seltzer and Modelo Ranch Water, an alcoholic sparkling beverage.

Constellation is in the clear

Constellation has had the right to distribute Modelo beers in the US since 1996 and has owned the US business since 2013. Its lawyers argued that a seltzer make not look or taste like a beer, but to all intents and purposes it is brewed, fermented – and taxed – like a beer. Hence, legally speaking, it is a malt beverage or a beer.

To underline the importance of this court case to AB-InBev, members of the jury were made to listen to presentations from A-B InBev’s former chief Carlos Brito, corporation leaders, and corporate attorneys during the trial, media reported.

In the end, the jury, on 15 March, sided with Constellation.

“We are pleased with the outcome of this trial and remain committed to continuing to operate in accordance with the terms of our sublicense agreement as we work with our distributor and retailer partners to continue to build brands consumers love,” Constellation commented.

AB-InBev expressed its disappointment and said it will be evaluating all options.