Czechs stoutly defend their Budweiser's good name


CESKE BUDEJOVICE, Czech Republic -- Its market saturated at home, Anheuser-Busch, the world's biggest brewer, is peddling its Budweiser beer internationally, trying to make it a global brand. But a feisty little beer maker here is standing in its way.

Both brewers have used the name Budweiser for more than 100 years. Long ago they reached an agreement that gave the Czech brewer the right to use the Budweiser name in Europe and the former Soviet Union, and gave Anheuser-Busch Cos. the right in the United States and Latin America.

But in this age of global markets, that agreement has come back to haunt the St. Louis beer giant. So when the Czechs embraced democracy and a program to sell off thousands of government-owned businesses, Anheuser-Busch decided to try to buy the little beer maker and the trademark.

Little did Anheuser-Busch know the people of this southern Czech town. They want no part of a giant Western company that they assume will only suck the charm and profits from their brewery. Besides, many Czechs say, Anheuser-Busch makes lousy tasting beer.

To soften up the proud folks here, Anheuser-Busch has opened a $1 million cultural center, inaugurated baseball and basketball teams, opened a marble-floored cafe and laid on scholarships and English lessons.

And how have the people here replied? They have said, no way. After years of courtship, the Americans have just about given up hope of ever owning the brewery.

Listen to Frantisek Nedorost, a 52-year-old electrician as he hugged an oversized mug of beer from the brewery, Budejovicky Budvar (pronounced bud-yay-oh-vit-say bood-var).

"I absolutely disagree with the Americans buying part of our company," he said. "I like Americans, their culture, their films. But I know American beer doesn't reach the quality of Czech beer. It's much poorer, much weaker."

As for the Anheuser center across the street, Mr. Nedorost said ** all the CD-ROMs, copies of the U.S. Constitution and red-and-white Cardinals baseball uniforms for a local team were a waste of money if the Americans were naive enough to think they might help buy a Czech crown jewel, the most profitable brewery in the country.

Mr. Nedorost has company -- including the mayor, Miroslav Benes, the bosses of the brewery and the Czech government, which has left the brewery as the only Czech beer maker still in government hands.

DTC "Foreign partners need us as a strategic partner to help them," said Petr Jansky, finance director of the brewery. "We don't need Anheuser-Busch, they need us."

Mr. Jansky greeted some recent visitors with an icy Budweiser Budvar, as the beer is called, and whipped out a survey showing Budweiser Budvar as the top rated and American Budweiser as the least favorite among finicky beer drinkers in Britain, one of the few markets in Europe where the two beers go head to head as Budweiser.

Even without foreign capital, Mr. Jansky said, the company has managed to modernize its plant and is improving its marketing and distribution. Production and sales are up 30 percent in the last few years. So why risk being swallowed by an international giant, he asked.

"It could end up being the same as asking Rolls-Royce to produce mass cars," he sniffed.

Officials of Anheuser-Busch say otherwise. They don't disguise the fact that settling the trademark dispute is the top priority, but they have stressed that the little beer company -- one their founder Adolphus Busch admired so much -- would benefit from a partnership.

August A. Busch III, chairman and president of Anheuser-Busch and the great-great-grandson of the founder, wrote to the Czech prime minister, Vaclav Klaus, saying his company was offering "virtually unlimited 'call' on Anheuser's capital and management capabilities to expand Budweiser Budvar's capacity," as well as worldwide access to the company's market and distribution system. Writing just before a planned 1993 privatization of the Czech company that was never held, Mr. Busch said the offer was made to correct "misimpressions or suspicions of our motives."

John S. Koykka, chief financial officer of Anheuser-Busch International Inc., said a settlement of the trademark dispute would help both companies by giving access for both in all markets.

But for the moment, Czech resistance is too much and Anheuser-Busch has dropped plans to buy into the brewery. Instead, Anheuser-Busch will try to pursue a trademark settlement separately, Mr. Koykka said.

With control of nearly 45 percent of the American beer market and with flat sales at home, Anheuser-Busch has been putting increasing emphasis on its international operations.

The company has bought stakes in breweries in Asia and Latin America, where beer consumption is up. Indeed, China has surpassed Germany as the second-largest beer market after the United States and Anheuser-Busch has acquired a 5 percent investment in the Tsingtao Brewery there.

The battle over the name Budweiser, which has employed legions of lawyers in dozens of countries for decades, has its origins in the fact that Adolphus Busch, the great-great-grandfather of the current president, had come to America from Germany in the middle of the 19th century with the knowledge that this little town made a distinctive beer. In those days, the town was in the Austro-Hungarian Empire and was known by its German name, Budweis.

After marrying into the Anheuser brewing family, Mr. Busch hit on the idea of making a new beer, and in 1876 named it Budweiser, with the thought that the prestigious beer name would work well in a country of immigrants from the Old World.

Busch made another cunning move: he called his beer the King of Beers, a twist on Budvar's slogan the Beer of Kings, from the royal court of Ceske Budejovice.

As soon as Mr. Busch started to brew his St. Louis beer he was sued by the Czech brewery over the Budweiser name. In 1911, the two makers of Budweiser reached their territorial deal.

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