The Czech Republic: Budweiser Budvar repels government attack aimed at depriving the brewery of its key export markets

Moves by the Czech government to undermine the state-owned Budweiser Budvar brewery by handing its key export markets to rival AB InBev, which owns the American Budweiser brand, have been thwarted, Morning Advertiser reported on May, 3.

The government had planned to turn Budvar into a joint stock company in preparation for privatisation.

Since the 19th century, Anheuser Busch in the US and Budvar have been engaged in a legal battle over the Budweiser trademark.

The legal costs of defending the trademark are high and the Czech government announced in February that agriculture minister Petr Bendl planned to sack Budvar managing director Jiri Bocek for being slow to end the trademark dispute.

Bendl promised an independent audit of Budvar’s accounts and said he would place a lawyer, Tomas Jindra, on the brewery’s supervisory board.

Budvar was supported by the regional governor of South Bohemia, Jiri Zimola, who promised a referendum of the people in the region, which includes Ceske Budejovice, Budvar’s home town.

It emerged last week that the key reason that Bendl threatened to sack Bocek was because he refused to agree to withdraw from key export markets such as North America and Western Europe.

By handing those markets to AB InBev, the Czech Government would have effectively ended the trademark dispute.

This was facilitated by the sale of a second brewery in Ceske Budejovice — Mestansky — to AB InBev.

Under European law, both breweries can use the Budweiser trademark and AB InBev now owns Mestanky’s trademark.

But Bendl has now reduced the size of Budvar’s supervisory board and Jindra has quit. Bocek has said he had no intention of withdrawing from any export markets. In 2011 Budvar’s net profits increased by 9.2% to 190.3 mln koruna.

04 May, 2012