Czech Republic: Budejovicky Budvar, the Czech Republic's third largest brewer, is going head to head, in terms of output, with Anheuser-Bush, an American brewing giant in many countries across Europe, Asia and Africa, Agence France Presse revealed on October 25.

Now almost 130 years on the American brewing giant is deeply embroiled in a global dispute with Czech brewer Budejovicky Budvar over who has the rights to the trademarks Budweiser and Bud. Budvar insists it has a geographical right to the name as the southern Czech town in which it is based, Ceske Budejovice, was formerly known by its German name Budweis and has a brewing tradition dating back to the 13th century. "We have a logical right to the name as Budweiser is the adjective of Budweis, the former name of the town where the beer is brewed. The town has a brewing tradition going back many centuries," Josef Tolar, brewmaster and board member at Budvar, told AFP.

For its part, the US brewer stresses that it registered the Budweiser trademark first, back in 1878. "Anheuser-Busch started brewing its flagship beer in 1876 and registered its famous brand name two years later, more than 17 years before Budvar was established in 1895," Stephen J Burrows, chief executive and president of Anheuser-Busch International, told AFP.

Budvar first registered Budweiser in the mid-1930s, almost 60 years after AB and didn't use the name prominently on labels until the 1960s, he added. "They are merely trying to trade off the name and reputation established by Anheuser-Busch," he said.

Back in Busch's day, America and the German-speaking Austro-Hungarian region in which Budweis lay were worlds apart. One century on, the dispute shows no signs of weakening. "The litigation has increased in the past 30 years," said Burrows.

The Czech brewer has scored victories in neighbouring Germany, its biggest export market, as well as Austria, while the Americans have won in places such as Italy and Spain. In Britain, uniquely, both brewers have equal rights to the name.

Still, in a complicated web of lawsuits and appeals there is no clear winner. As soon as a court announces its ruling on the dispute the other brewer instantly appeals and the process continues. "Very few of the disputes in any of the countries are actually finished," Budvar's lawyer Helena Lejtnarova told AFP.

"It is an unusual dispute in that both brewers have been around for a long time. It is also a very expensive one as we need representatives in every country and all the documents have to be translated," she added.

During a brief respite in the mid-1990s there were negotiations between the two brewers about AB buying into Budvar, which broke down unamicably. Lejtnarova says the awarding of EU geographical protection indicator rights to beer produced in Ceske Budejovice with the Czech Republic's EU entry in May may help Budvar's case. Burrows however argues that appellation of origin protection does not apply to beer. "Beer ingredients can be transported anywhere for production and maintain its characteristics," he said.

"Even if appellation of origin did apply to beer, Budvar would not be entitled to it because there is no town named 'Budweiser' or 'Bud'," he added. Banned from the North American market under an agreement drawn up between the brewers in 1939, Budvar took its first steps back into the market three years ago with the launch of Czechvar, a label specifically developed to get round North America trademark restrictions. AB has raised no objections.

In Europe, where the dispute is most widespread, meanwhile AB insists it is holding its own. "Anheuser-Busch has the right to sell its flagship brand under the Budweiser or Bud name in 20 of the 25 European Union countries, including the United Kingdom, Ireland, Italy and Spain," says Burrows. The dispute is the key reason successive Czech governments have sidelined the privatisation of Budvar, the last state-owned brewery. "Given the ongoing trademark dispute the privatisation would not be a good idea at present," said Ministry of Finance spokesman Marek Zeman.

Tolar says the dispute costs Budvar tens of millions of koruna (millions of euros, dollars) each year while Burrows refused to reveal how much the US brewer spends. "It takes a lot of time and money but we must defend our position to the end," said Tolar. "As a big company it is easier for Anheuser-Busch to invest in marketing and paying the best specialists to fight the cases. But we have a great moral advantage; everyone sympathises with the weaker opponent," he added.

27 October, 2004