Constellation Brands and Grupo Modelo have settled a legal dispute over funding for their 50-50 joint venture in the US, Crown Imports.

Both companies have agreed on a promotions and marketing budget for Crown Imports in 2010 and “through the remainder of the term of the joint venture,” Constellation and Modelo said in a joint statement today (29 October).

“We are pleased to have reached an agreement that is favorable to both joint venture members and Crown’s business,” said Rob Sands, president and CEO of Constellation Brands, and Carlos Fernandez, chairman and CEO of Grupo Modelo. “Crown will continue to have the world class marketing and promotional programs that have made it the unrivaled leader in the U.S. imported beer category,” they said.

Further details of the settlement were not released.  

Both firms are contracted to work together in the US, where they sell Modelo’s Corona lager, until 2016. However, news of the legal dispute, which was sparked by a Modelo complaint late last year, led some analysts to question whether Crown Imports could remain viable.

“Suing one’s business partner is generally a bad precedent for ongoing business relations,” said analyst group Stifel Nicolaus.

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In July, Constellation’s Sands dismissed the Modelo’s lawsuit as “a dispute over financially immaterial items”. He said the two would “continue to work closely together”.

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