Saturday, January 12, 2008

Budvar to stay home ... for now

According to, Budvar —the Czech brewery in the city of Budweis and owned by the people of Czech Republic— will not be privatized, if at all, until 2011 at the earliest. That's after the next Czech national election, when such annoying things as politicking would not be at the fore.

The current Czech government is not likely to sell state-owned brewery Budvar during its term in office, ending in 2010, due to a lack of time. However in the future all or part of the brewery should be sold to a strategic partner, the Czech agriculture minister was cited as saying.

'If (the state) really wanted to hold onto a controlling stake (in Budvar), it would be a matter of political discussion and a future government,' weekly Ekonom cited Petr Gandalovic as saying.

I learned of this at Stonch's Beer Blog, who noted:
The fear, of course, is that American giant Anheuser-Busch, who already distribute Budvar beers in the USA, will be at the front of the queue if a privatization goes ahead.

Due to a long and sometimes acrimonious battle over trademark, Budvar Budweis has been re-branded here in the US as Czechvar. It's an irony that Anheuser-Busch (maker, of course, of Budweiser) is distributing the beer here at all, since it is still engaged with Budvar in a global naming-rights agon.

Would it be a bad thing if Anheuser-Busch were to purchase Budvar?

Consider this. The giant US brewery's sales have been sluggish recently, with any potential for real growth coming from import distribution and global expansion. Owning a super-premium property (after all, that's what we're really talking about here) would end all those trademark litigations, would gain Anheuser-Busch (A-B) further market growth, and would bring it a measure of good-beer credentials.

But would A-B dumb-down the beer?

First of all, is Budvar the 'best' beer in the Czech Republic, or the most popular? I don't know.

Now, consider Miller Brewing Company's purchase several years back of the the US licensing rights to the name Lowenbräu. It did indeed use the name for a corn-fed ersatz brew.

But it was the purchase of a name only, not a brewery; it was limited to the US; it occurred prior to the current widespread good-beer culture. In 2002, by the way, the name were 'un-sold'.

It would be silly, I believe, for A-B to merely refashion Budvar merely as a super-Michelob. With a purchase, they would have—already in-place—the tradition, the bona fides, the brewery, and the worldwide infrastructure for a superior beer. And, at least in the short run, there would be eagle-eyed attention for any perceived diminution in quality.

A-B & InBev?

I think it more likely and significant that we'll be seeing A-B purchasing much of brewery conglomerate quisling InBev. A-B wants to re-brand itself as the world's largest beverage maker.

More here on that.
Original rumor about sale here.

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