Is Hard Seltzer 'Beer?' A Legal Battle Over the Definition Is Being Fought By Two Brewing Giants
Constellation Brands owns the right to make Corona beer in the U.S., but does that mean they can also make Corona Hard Seltzer?
Hard seltzer has taken the beer world by storm, quickly grabbing a large share of the beer market as all sorts of beer brands rolled out their take. But is hard seltzer actually beer? In some ways, kinda. It can be produced in a brewery just like beer. But in other ways, not at all. Hard seltzer isn't typically made with beer's main ingredients: barley and hops. So which is it?
Two of America's largest beer makers really want to find out—and not just for the sake of curiosity. Anheuser-Busch InBev and Constellation Brands are currently locked in a legal battle over Corona Hard Seltzer, which Constellation believes they have the right to make because they own the Corona beer brand in the United States. But Anheuser-Busch InBev—who owns the Corona brand everywhere else through Grupo Modelo—says, yes, you own the "beer" brand, but you can't make Corona Hard Seltzer because hard seltzer isn't "beer."
As Law360 reports, Constellation—who got their hands on Corona in America as part of an antitrust agreement—believes it has "an expansive license" to make Corona products beyond the standard beach beer. "The sublicense agreement unambiguously includes sugar-based brewed beverages (including those called 'hard seltzers') within its definition of 'Beer,'" the company reportedly stated in a legal filing. "This court should reject ABI's latest effort to squelch a major competitor, and need only construe the sublicense agreement as written to conclude that Constellation has every right to market and sell Corona Hard Seltzer to the legions of customers who enjoy it."
But the world's largest beer company didn't get where it is today by letting things like this slide. On Monday, Modelo reportedly responded by pointing out that Constellation had never referred to Corona Hard Seltzer as a "beer" in the general marketplace, adding that "an average person asking for a beer would be perplexed (and likely disappointed) when a bartender serves a Corona Hard Seltzer."
"How does Constellation attempt to reconcile this contradiction?" Modelo was further quoted as writing. "By claiming that Corona Hard Seltzer—a malt-free, hop-free, sugar-based product—is some non-beer 'beer' even though it does not taste, look, or pour like, or have the ingredients of, a beer."
What a court may think of all of this isn't yet clear. But the outcome could have major repercussions for America's hard seltzer market. Though White Claw and Truly are the two top-selling brands, things start to get competitive from there. The Anheuser-Busch InBev-owned Bud Light Seltzer brand is the country's third best-selling hard seltzer brand. Constellation Brands says that Corona Hard Seltzer is the fourth.