Tabasco Maker Files Lawsuit Against Stoli Group, Alleging Trade Dress Infringement Over Spicy Vodka Launch
This report was originally published by Food Dive. For daily industry news and analysis, subscribe to the free Food Dive newsletter.
In a move that spices up the competitive spirits landscape, the McIlhenny Company—the family-owned producer behind the iconic Tabasco brand—has filed a lawsuit against Stoli Group USA. The complaint, lodged in a Texas court, alleges that Stoli's recently launched Halapeño Pepper Vodka infringes on Tabasco's trademarked trade dress by utilizing a strikingly similar red and green color scheme and bottle design.
The legal filing reveals that the two companies were in advanced discussions throughout late 2024 to co-develop a spicy vodka. Those negotiations ultimately collapsed when McIlhenny "decided to go in a different direction." According to the lawsuit, Stoli proceeded independently, launching a product that McIlhenny claims directly employs the visual identity and packaging concepts shared during their confidential talks, merely omitting the Tabasco name.
"This isn't just about colors; it's about the deliberate appropriation of a brand's visual equity built over 150 years," stated a source close to McIlhenny's legal team. The company argues the similarity is likely to cause significant consumer confusion in a crowded market, especially as Tabasco has now officially entered the arena with its own Tabasco® Infused Vodka, created in partnership with Absolut.
The timing adds a layer of complexity. Stoli Group USA, along with its affiliate Kentucky Owl, filed for Chapter 11 bankruptcy protection in 2024. The jalapeño-flavored vodka marked its first major product launch since entering proceedings. McIlhenny has now requested a preliminary injunction to halt Stoli's use of the contested design pending trial.
Stoli Group USA did not immediately respond to requests for comment on the litigation.
Industry Context & Analyst Insight
The legal clash underscores the high stakes in the burgeoning flavored spirits segment. With overall alcohol consumption facing headwinds, major players are aggressively targeting the growing consumer appetite for spicy flavors. Data cited by Absolut projects spicy vodka sales to surge by 27% by 2029.
"This lawsuit is a strategic battlefield over market positioning," said David Chen, a beverage industry analyst at GlobalData. "Tabasco's move with Absolut was a clear shot across the bow. The legal action isn't just about protecting IP; it's an attempt to stifle a competitor's momentum right out of the gate, particularly one navigating bankruptcy."
Voices from the Industry:
"As a brand manager, this is a nightmare scenario," commented Sarah Jennings, a marketing director for a craft distillery. "Confidential partnership discussions should be sacred. If Stoli used shared designs, it sets a terrible precedent for future industry collaboration."
"This feels like sour grapes from Tabasco," argued Marcus Thorne, a veteran bartender and spirits consultant, with a sharper tone. "Red and green for a pepper product? That's not innovation, that's logic. The market is big enough for both. This lawsuit reeks of a legacy brand trying to bully a competitor that's down due to its bankruptcy, rather than competing on product merit."
"The consumer confusion argument has real weight," noted Priya Sharma, an intellectual property lawyer. "Trade dress protects a product's total visual appearance. If consumers might mistakenly associate Stoli's vodka with Tabasco's quality and heritage, McIlhenny has a strong case for injunction."
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