Tabasco maker McIlhenny Company has filed a lawsuit against Stoli Vodka, claiming that the company’s new Halapeño Pepper flavor infringes on its trade dress rights by using a similar packaging design. This action arises after a failed partnership between the two companies, where discussions for a co-branded spicy vodka took place in late 2024. McIlhenny asserted that it opted to pursue other ventures, concluding the negotiations, while Stoli independently launched its spicy vodka.

The lawsuit emphasizes that Stoli’s product copied the iconic red and green color scheme associated with Tabasco. McIlhenny’s attorneys argue that Stoli has used a design the hot sauce maker proposed during the collaboration talks, but without including the Tabasco name. This resemblance, according to McIlhenny, could lead to consumer confusion.

The legal challenge was initiated as part of Stoli Group USA’s bankruptcy proceedings, which were filed in 2024. Stoli’s Halapeño Pepper Vodka marks the company’s first new product since its bankruptcy filing. McIlhenny is pursuing a preliminary injunction to prevent Stoli from using the contested design until the case is resolved in court.

Though both Stoli and Absolut—a brand under Ricard Pernod—are navigating a decline in alcohol consumption, they aim to leverage the growing consumer interest in spicy flavors, especially in alcoholic beverages. Sales of spicy vodka are expected to surge by 27% by 2029, according to data cited by Absolut.