Numlock Sunday: Dave Infante on a shocker of a hard seltzer verdict
Numlock Sunday: Dave Infante on a shocker of a hard seltzer verdict
By Walt Hickey
Welcome to the Numlock Sunday edition.
This week, I spoke to Dave Infante, who is behind the excellent newsletter
. This week there was a truly surprising jury verdict in a blockbuster lawsuit between two brewing titans, one that unexpectedly determined that hard seltzer is, in fact, beer now. Go figure.I’m a big fan of his work, and I wanted to have Dave on to talk about this suit as well as the dynamic events going on over at Bang Energy.
Dave can be found at the
newsletter as well as on Instagram and Twitter.This interview has been condensed and edited.
Dave Infante, you are the brilliant writer behind Fingers, one of my favorite newsletters. This has been a really auspicious couple weeks; you normally cover the alcohol beat, but it seems like recently you have just been covering the courthouse beat. There was this big suit between Constellation and Modelo that you've been reporting on constantly. What's at stake?
The lawsuit was between Anheuser-Busch InBev and Constellation Brands. ABI is the biggest brewer in the world and Constellation Brands is one of the largest macro brewers in the country. So, they're not the same size, but they're both major players. The question that they found themselves squabbling over and ultimately couldn't resolve on their own, and they wound up in court about, was over the composition of Corona Hard Seltzer, which Constellation Brands launched in 2020.
Obviously, every big brewery, every big beer brand rushed to get a hard seltzer out. A lot of the bigger brands did line extensions, like Bud Light Seltzer launched. Coors Light, for a minute, had a hard seltzer, and Corona did the same. That was to compete with Truly and White Claw who were, at that point, just burning up the beer aisle. Everyone needed to compete with this new category.
The trouble came because Corona, everywhere else in the world, is owned by Grupo Modelo, which is a subsidiary at this point of Anheuser-Busch InBev. In 2013, when ABI went to buy Grupo Modelo, the government said, "You’ve got to spin off these brands to someone else, because otherwise you have an antitrust problem and we won't let the sale go through." They spun them off to Constellation in the U.S. Constellation owns the license to the Corona trademark in the U.S., ABI owns it everywhere else.
Constellation rolled out a Corona Hard Seltzer here in the U.S. and ABI was like, "Well, wait a second. We only gave you the license for Corona beer. Hard seltzer is not beer, so therefore, you aren't allowed to be doing this."
They could not sort it out, they couldn't find the settlement. They wound up in court in the Southern District of New York this month.
You were shocked by the outcome of this trial, it's fair to say.
Yeah. Oh, absolutely. Let's skip to the end here. We just got the verdict Wednesday of this week. By the time people read this, yeah, it's only a few days old. An eight-person jury returned a verdict in, apparently, about an hour or so. Not a lot of time for a two-week trial with a bunch of technical jargon. They ruled in favor of Constellation.
The way I framed it, a way to easily understand the stakes or understand the dynamic here, I came up with a cute little rhyme. "If hard seltzer is beer, Constellation's in the clear, but if not, ABI wins a lot."
So that's the stakes, because if hard seltzer is beer, that means that Constellation's license covers Corona Hard Seltzer.
Which, for what it's worth, is an insane sentence, because hard seltzer is absolutely not beer, but a jury disagrees.
I was going to say. People in the Southern District of New York who are called by Federal Judge Lewis Kaplan would disagree with you, my friend.
It's like how a tomato is legally a vegetable, but it's biologically a fruit.
Right, totally. Basically, industry people are always very wary to go to trial. I think this happens in other industries as well, but certainly, it's a notorious thing in the beer industry. Because the last thing you want to do is leave technical brewing questions up to a layperson jury. It's just, you never know what's going to happen. This was a shocking outcome.
They ruled in favor of Constellation. They said, "We think Corona Hard Seltzer falls under the license of beer and therefore, Corona defends successfully against ABI." Which is a disaster for ABI. I mean, this was a suit that they brought, they had more manpower, they had the high ground, I would say. I think most people in the industry would agree with me that hard seltzer we think of as a different category.
We know that drinkers don't always see the difference, but it looks different, it's flavored different, it's marketed different. There's a fair amount of daylight that industry people see between hard seltzer and beer. This is just another reminder that just because it is so in the industry, doesn't mean the rank-and-file drinker feels the same way.
Fascinating. Now just to transition a little bit, if you had asked me when I woke up this morning, "What's the most interesting trial that Dave's got on his plate this week?" I would've said that one, but then some news dropped today about the protagonist of your newsletter. What's going on with Bang?
I like the idea that he's the patron saint of Fingers.
We are talking about the septuagenarian founder of an energy drink corporation.
I'm talking about my man, Jack Owoc, he founded Bang Energy. I guess he's in his 70s, he's a swole grandpa and he's been going through the wringer. He founded the parent company of Bang Energy in 1993. He built this enormous, admittedly very successful empire of energy drinks and a bunch of spinoff drinks or whatever. He's a total wild card. He's always gone his own way. He lives and dies by his instincts.
He's extremely colorful, he’s got a ton of right-wing politics, he's his own man. He's a weird, weird fella. So the company had this deal with Pepsi — he torpedoed it back in 2021. It's been trying to find its footing ever since. We're talking about billions of dollars here, Walt. This is not some fringe player, it is a legitimate challenger to Monster, which, they're number two in this space and Red Bull's number one.
This is not a sideshow issue, this is a big deal. But, the company's been reeling and lawsuits have really stacked up for him. He's gotten some trademark infringements. He's faced trademark lawsuits from Monster and from another brand. He wound up losing in court several times, also lost in federal arbitration. Now the company, as of October 2022, had about half a billion dollars' worth of legal judgements outstanding against it.
They filed for Chapter 11 bankruptcy in October and they've been restructuring. As of last week, the board of directors at Bang Energy decided finally, they’ve had enough of Jack and they decided to oust Jack from his role as CEO of the company. That's where we were. I think the most recent thing that had happened was the board is trying to get his TikTok and Instagram passwords, because he has millions of followers on those accounts.
They're worried, basically, that he's going to try to torpedo the bankruptcy proceeding. But, now that he's on the outs, they are worried he's going to poison the well and use the bully pulpit of his Instagram account to make their lives harder. Which is entirely possible. I mean, he's very savvy, obviously, but he's also incredibly self-destructive. Which is why it's so fun to watch him just go on Instagram Live and yell about his real and perceived enemies for millions of people to watch. That's great for us, as journalists who love good copy.
This is part of the reason I gravitated to Jack Owoc in the first place, is because for all of his flaws and failings or my disagreements with him personally about his politics or whatever the case may be, I mean, one thing you have to say about him, you’ve got to hand it to him, is that he's just really interesting to watch. He's incredibly colorful, he's a born showman and he's also got this just incredibly 'let it all burn' streak to him. When he's cornered you never know what he's going to do, and the board is clearly very concerned about what he's going to do.
Yeah, it's not often you get a billion-dollar company trying to make somebody stop tweeting through lawsuits.
Yeah, that's literally what it is. The Vital Pharmaceuticals board filed a restraining order in South Florida Bankruptcy Court just two days ago, so midweek, this week. It's an emergency restraining order to get him to stop posting. Which just fucking rocks, dude. I read the restraining order yesterday and I spent $8 on PACER just to be able to find the appropriate document, because I was so fascinated by it.
It's written just like millions of other bankruptcy filing documents that you've ever come across, except for this one passage where it's like, "Make Jack Owoc forfeit the logins to his TikTok account @bangenergy.ceo, because they're powerful and we can't have them tweeting." It's great. I feel very grateful to be alive during this time. I love him. He's so special to me.
As of last night, by the way, Thursday night, it looks like some cooler heads prevailed here. Jack's attorneys have agreed to hand over some of his passwords. It's not clear, this is Bloomberg reporting last night on Jack and his wife, Megan Owoc, because of course, this thing is all just a cabal of Jack's close associates. His wife is very involved in the company. His executive vice president is a friend of his or whatever.
Again, the real question here is how this business ever got to be as big as it was. Credit to him for somehow making it happen against all odds. But anyway, they agreed to hand ‘em over. They said they would not make any posts to TikTok, Instagram or Twitter for 45 days. That's where that has landed so far, but it'll continue to develop and I will be paying close attention.
As people are aware, I'm very, very fond of your newsletter. It's a really great read. You've written some really great stuff, just whether it's at VinePair or your general day to day, but it's just such a fun look at what I think, and I hope you agree, is one of the most interesting industries currently going on in the world.
Yeah, thanks, man. I mean, that's always what it comes down to, right? It's like, brews is something we all love, but also, it's this major industry. The confluence between the exciting, beloved brands and shit and the billions of dollars at stake make for some very funny outcomes.
It's just so much money combined with you just have characters. Companies that go to lawsuits against one another and then decide that beer and hard seltzer are the same thing. It's idiosyncratic, to say the least.
Amazing. Well, if folks want to pay close attention, where can they find you? Where can they find Fingers?
Yeah,
, it's a newsletter. It's fingers.email. You can find me there. I'm constantly tweeting about this stuff @dinfontay and I file a weekly column for the beverage industry publication VinePair. I cover the beer industry there and that's most of my writing. You can also find my shitposts about the beverage industry on Instagram @its.fingers. It's just the Instagram of the newsletter and I waste a ton of time making esoteric memes that I don't think too many people actually understand. But, they like them anyway, because they're very kind to me.I started following it a couple months ago and I've really enjoyed it.
Thank you very much.
I will vouch an endorsement of that.
Thank you. Thank you.
If you have anything you’d like to see in this Sunday special, shoot me an email. Comment below! Thanks for reading, and thanks so much for supporting Numlock.