Bud Light’s CEO was blindsided when a court handed him this crushing defeat

Apr 8, 2024

Bud Light’s problems are growing beyond its woke controversy.

Now the embattled brand is dealing with a loss to a major competitor. 

And Bud Light’s CEO was blindsided when a court handed him this crushing defeat.

Anheuser-Busch InBev – the parent company to Bud Light – has another major problem on its hands.

Bud Light’s sales are still plummeting from the boycott that broke out against the brand over its partnership with a transgender social media influencer.

Anheuser-Busch InBev CEO, Micheal Doukeris, said on a fourth-quarter 2023 earnings call that revenue plummeted “primarily due to the volume decline of Bud Light.”

Now the company was dealt a stunning setback when a New York jury sided with one of its chief rivals.

Anheuser-Busch loses in court against competitor

Mexican brewing company Grupo Modelo is owned by Anheuser-Busch.

But rival brewer Constellation Brands acquired the rights to Grupo Modelo’s products in the United States, like Corona, Modelo Especial, and Pacifico, after a 2013 settlement following an antitrust case against Anheuser-Busch by former President Barack Obama’s Justice Department.

Constellation Brands launched hard seltzers under the Corona and Modelo brands.

Hard seltzers became one of the fastest-growing segments in alcohol in recent years, and Constellation wanted to get in on the trend by utilizing two of its most popular existing brands.

But Anheuser-Busch InBev claimed that Constellation didn’t have the rights to sell Corona and Modelo branded hard seltzers in the U.S.

“AB InBev’s Mexican arm Grupo Modelo filed the lawsuit against Constellation accusing the company of violating a brand-licensing agreement when it launched Corona Hard Seltzer,” FoodDive reported. “The lawsuit said the agreement only allowed Constellation to use Corona in the U.S. for beer. (Constellation countered that the licensing deal allowed it to sell other alcoholic drinks.”

What is the legal definition of a beer?

The dispute came down to what the definition of beer is under the licensing agreement.

Last year, a Manhattan jury in federal court ruled that Constellation had the right to sell Modelo Ranch Water and Corona Hard Seltzers because malt beverages fall under the definition of beer.

And a federal appeals court upheld that ruling.

Constellation argued in court that “other versions” of beer and malt beverages under its agreement with Grupo Modelo allowed it to sell the Corona and Modelo branded seltzers.

Anheuser-Busch disagreed with the court’s ruling, claiming that the seltzers weren’t beer.

“When Grupo Modelo provided Constellation with a license to sell those beer brands in the U.S., Grupo Modelo never agreed that Constellation had the right to use our iconic Corona and Modelo brands for sugar-based seltzers that are clearly not Mexican cervezas,” an Anheuser-Busch spokesman told BrewBound.

Now Anheuser-Busch has to battle a major rival in the competitive hard seltzer category.

Hot Take Politics will keep you up-to-date on any developments to this ongoing story. 

Latest Posts: