From the HBD Archive
From: synchro!chuck@uunet.UU.NET
Subject: Budvar
Date: 1992-03-06 18:52:08 GMT

I won't type the whole thing in, but here's a few paragraphs from an
interesting article.

Reprinted without permission from the March CAMRA What's Brewing:

*** START OF REPRINT ***

EXCLUSIVE: Budweiser seeks stake in Czech rival

US GIANT IN BUDVAR BID

by Roger Protz

The world's biggest brewer, Anheuser-Busch of the United States - producer of
the international Budweiser brand - has told the Czech government that it
wants to buy a 30 percent stake in the rival Budweiser Budvar brewery when it
is privatised.

The two beers and their conflicting trade marks have been deadly rivals for
almost a century. Courts have been kept busy for years deciding which brewery
could sell its beer under the Budweiser name.

Now Anheuser-Busch, which owns 12 breweries in the US and produces 90 million
barrels a year, has moved to end the conflict by building a bridgehead in
Czechoslovakia.

John N. MacDonough, executive vice-president for marketing with
Anheuser-Busch, outlined his company's proposals in London last month
following a visit to the Budvar brewery.

A 30 per cent holding in Budvar, he said, would allow the Czechs to expand
capacity, currently 300,000 barrels a year.

Anheuser-Busch would also help the Czechs market the beer internationally.
MacDonough said he believed Budvar had great potential world-wide. The two
companies were cooperating to sell the beers as "Budweiser Budvar" and "Bud"
in Europe.

The US giant would even help Budvar sell the beer in the United States with
"certain label modifications".

"We can sell American Bud to Mexico and Japan but it's more difficult in
Germany and the rest of northern Europe," MacDonough said.

"It's like trying to sell white wine as red wine - Europeans want a
full-bodied beer and Budvar is just that."

The Anheuser-Busch proposal is just one of many that the Czech government has
received concerning Budvar.

Forty-two companies, including firms in Austria, Germany, and Japan, have also
expressed an interst in either buying the Czech company outright or taking a
holding in it. John MacDonough claimed that his offer was the "preferred bid"
in Czechoslovakia.

The Budvar brewery would neither confirm nor deny this but a joint letter from
the two breweries to the Czech government said that Budvar "evaluates the
offer of A-B as the priority offer" among all those submitted.

(the article then lists 8 guarantees from A-B to the workers and management at
Budvar - CCC)

John MacDonough stressed that Anheuser-Busch would not attempt to put pressure
on Budvar to shorten the lagering (conditioning) time of their beer -
currently 12 weeks - or to use cheaper ingredients.

Budvar is an all-malt beer that meets the requirements of Germany's "Pure
Beer" law. American Budweiser uses rice as well as malt in its recipe.

"Our intention is to help make Budvar one of the strongest brands in Europe,"
MacDonough said.

Negotiations are expected to continue for some time before a final decision is
made by the Czech government, which is privatising all former state-owned
industries.

*** END OF REPRINT ***

Elsewhere in What's Brewing, they editorialize that the tone of the offer
sounds more like A-B wants 100% of Budvar, not just 30% as they claim.
Certainly some of the promises that A-B is making require more than 30%
control to guarantee. As you might expect, CAMRA is not in favor of a small
traditional brewery like Budvar being absorbed by a giant like A-B.

While I agree on principle, I must admit that the idea of getting Budvar over
here is attractive.

=====
Chuck Cox
Hopped/Up Racing Team
chuck@synchro.com


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