After suing Constellation Brands (CBrands) for alleged violation of a sub-licensing arrangement for the Corona brand (inside.beer, 15.2.2021), Grupo Modelo, the Mexico subsidiary of AB InBev has filed a second law suit on Tuesday, over Constellation's launch of two Modelo Reserva beers.
As Reuters reported, one of the beers, Modelo Reserva Tequila Barrel Mexican Lager Beer, allegedly breaches U.S. and Mexican laws that strictly limit the use of the word tequila, while the other one, Modelo Reserva Bourbon Barrel Mexican Lager Beer, breaches CBrands' sub-license to sell "Mexican-style beer" because bourbon is not a Mexican product. In addition, the sub-license does not allow this type of spirit branding, the suit says. According to the filing, Mexico's Tequila Regulatory Council also supports Modelo’s claim.
Already in June, Grupo Modelo informed CBrands about the alleged breach of the agreement but CBrands refused the claims saying that the two products fully complied with the sub-license terms.
The sub-license stems from 2013, when AB InBev fully acquired Grupo Modelo from Mexico and agreed with U.S. antitrust regulators to sell Modelo’s business in the U.S. to CBrands for USD 5.3 billion. This deal also marked the entry of CBrands into the beer market. However, Modelo and Anheuser Busch respectively stayed the owner of brands like Corona and Modelo but granted CBrands a sub-license for those brands for the U.S. market.
It is now up to the U.S. district court of the southern district of New York to rule on the matter.
