The beverage brand that owns Budweiser, Corona, and Stella Artois, is suing US beer-maker Constellation Brands for using the Corona brand name in a hard seltzer, according to a lawsuit filed Monday.

Beverage giant Anheuser-Busch InBev (AB InBev) acquired Corona's parent company, Grupo Modelo, in 2013, but US antitrust regulators required it to sell the company's US-based business to Constellation. AB InBev retained rights to the products in other markets, and the deal gave Constellation the rights to produce Corona and other Modelo brands in the US.

Grupo Modelo, AB InBev's Mexico-based brand, claims that Constellation violated the deal by using the Corona brand for a non-beer product, according to court documents reviewed by Insider. Reuters first reported the news of the lawsuit, which comes amid surging demand for hard seltzer in the US, on Monday.

Constellation told Reuters in a statement that the company was "very surprised" by the lawsuit and called it an attempt to squash a competitor.

Constellation's Corona hard seltzer launched in the US in February 2020 and has become the fourth-largest seltzer brand with a 6% market share, the beer-maker said last October. The top three spots are held by White Claw (owned by Mike's Hard Lemonade maker Mark Anthony Brands), Boston Beer's Truly, and Bud Light Seltzer, owned by Ab InBev and launched in January last year.

White Claw and Truly have a combined 75% market share, according to Nielsen data. But competition is heating up. In 2018, there were 10 hard seltzer brands on the market. In 2020, there were 65, according to Nielsen. Beyond breweries, brands like Coca-Cola, too, are getting into the market.

AB InBev was sued earlier this month by an Oregon-based Suzie's Brewery Company for marketing Michelob ULTRA Hard Seltzer as the "first" and "only" organic hard seltzer on the market. Suzie's Organic Hard Seltzer hit the market last summer, whereas Michelob ULTRA Hard Seltzer was rolled out earlier this year.