E-Malt.com News article: EU: Bud case – a blow to Anheuser-Busch and a great publicity for its Czech rival

The European court's ruling that Anheuser-Busch should not have rights to the brand throughout the EU is a blow to the US firm but a positive for Budvar, which has gained good publicity over the years from its Bud battles, Drinks Business Review communicated on December, 17.

Anheuser-Busch has been fighting for trademark exclusivity of the Budweiser name for a number of years, with varying degrees of success. The company claims to have used the Budweiser name for longer than Budejovicky Budvar, having been founded in 1876 while the latter was formed in 1895. However, the Czech company claims that the Budweiser name has been in use for much longer, as it refers to a type of beer that has been brewed in a specific region of the Czech Republic since 1260, predating the American claim by 616 years.

The latest ruling means that unless Anheuser-Busch decides to appeal the decision, it will have to battle it out with Budvar on an individual country basis, which could be costly. This is something it may wish to avoid, given the company's recent acquisition by InBev and subsequent cost cutting exercises: indeed, the firm has slashed 1,400 jobs in the US alone since the deal.

For Budejoviky Budvar, the ruling, like those before it, has been a marketing gift, providing it with good publicity. With consumers engulfed in skepticism about civil and corporate institutions, the public is likely to side with an underdog such as the Czech brewer, rather than a US corporate giant. Budejovicky Budvar could therefore benefit from positive word of mouth marketing about its brand.

Despite their legal wrangling, the two companies have reached a deal in the past. In 2007, Anheuser-Busch formed an agreement to import Budejovicky Budvar's Czechvar brand into the US, demonstrating that the two brewers have respect for each others' beer products even if they do not recognize each others' use of the Budweiser brand.

Anheuser-Busch could save itself a considerable amount of money if it enabled Budejovicky Budvar to use the brand alongside its own Bud. This is what has happened in the UK, where the courts gave both companies ownership of the Budweiser brand. The two brands have different postionings anyway: Budejovicky Budvar's offering is promoted as a premium beer, while the US giant's Budweiser is targeted at more mainstream markets.

Whether Anheuser-Busch will continue its fight for exclusive use of the Budweiser brand name remains to be seen. If current results are anything to go by, however, Budejovicky Budvar can be expected to be the main winner in the game, experts state.



19 December, 2008