AB InBev Sues Constellation Over Modelo Beer Deal

The Mexican arm of Anheuser-Busch InBev has accused Constellation Brands in a lawsuit of a second breach of their deal allowing Constellation to sell Mexican beers in the United States.

Grupo Modelo filed a suit in the US district court of the southern district of New York on Tuesday, August 31, according to a court document, over Constellation’s launch of two Modelo Reserva beers; one aged in tequila, and another in bourbon barrels.

It claims the first breaches US and Mexican laws that strictly limit the use of the word tequila, and the second breaches Constellation’s sub-licence to sell “Mexican-style beer” because bourbon has nothing to do with Mexico.

Constellation claims Grupo Modelo’s claims were without merit and that it had fully complied with the sub-licence terms.

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. The world’s largest brewer retained rights to Modelo brands.

The filing states that Grupo Modelo notified Constellation of the issue in June and that Constellation had refused to stop selling the product.

AB InBev, which confirmed the filing, stated Mexico’s Tequila Regulatory Council (CRT) had also demanded Constellation cease its use of the word tequila in marketing.

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