Android Studio Update 0.4.0 could not find buildConfig()

After upgrading Android Studio to version 0.4.0 I got a new error:

I upgraded to gradle 1.9 via the gradle-wrapper.properties

distributionUrl=http\://services.gradle.org/distributions/gradle-1.9-all.zip

and upgraded the gradle version in build.gradle

dependencies {
    classpath 'com.android.tools.build:gradle:0.7.+'
}

Now my project is building again.

I have some String constants defined for different productFlavors:

productFlavors {
    local {
        buildConfig "public static final String MY_KEY = \"\";"
    }

    alpha {
        buildConfig "public static final String MY_KEY = \"XXXXX-XXXXX-XXX\";"
    }

    beta {
        buildConfig "public static final String MY_KEY = \"YYYYY-YYYYY-YYY\";"
    }
}

And here is the new error

Could not find method buildConfig() for arguments [public static final String MY_KEY = "";] on GroupableProductFlavorDsl_Decorated{name=local, minSdkVersion=-1, targetSdkVersion=-1, renderscriptTargetApi=-1, renderscriptSupportMode=null, renderscriptNdkMode=null, versionCode=-1, versionName=null, packageName=null, testPackageName=null, testInstrumentationRunner=null, testHandleProfiling=null, testFunctionalTest=null, signingConfig=null, resConfig=null}.

Everything was working with Android Studio 3.7