Blog: Chris MercerSshhh! Don't mention the lawsuit

Chris Mercer | 5 July 2010

Constellation Brands would have us believe that everything is sweetness and light between itself and joint venture partner Grupo Modelo.

Everyone is best of friends down at Crown Imports, according to Constellation CEO Rob Sands, despite the fact that the US beer venture's owners have been engaged in a legal dispute.

It's like the scene from the hit television series Fawlty Towers here in the UK, where the English hotel owner reminds staff not to mention the war to a party of German guests. "I mentioned it once, but I think I got away with it," goes the line.

However trivial the lawsuit filed by Modelo - and Constellation has called it "financially immaterial" - can two firms really work past a dispute that has reached such a level?

For now, both sides appear to be getting on with the job.

But, I would still question their long-term relationship. If, as expected, Anheuser-Busch InBev swoops in and buys up Modelo then I doubt Crown will survive the change. A-B InBev doesn't need distribution funds from Constellation.

Perhaps that is the break that both companies can see on the horizon.


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