With its $52 billion takeover of Anheuser-Busch safely in the bag, one side effect may be that Budweiser Budvar may well become a target for the world's biggest brewing company. InBev inherits more than 100 legal disputes, mostly over versions of the Budweiser trademark, in more than 30 jurisdictions around the globe. Batting for the other side is Czech state-owned brewery Budejovicky Budvar, which has Bud and Budweiser brand trademarks registered in 28 European and 37 non-European countries. Anheuser sells Budweiser in 16 countries and the Bud brand in 15.*
Anheuser and Budvar have fought for solo control of the Budweiser brand for a century, though with more ferocity in the past decade as Budvar’s exports have increased. One way out for InBev would be to buy Budvar. That could cost more than $2 billion, the price being high due to the value of the Czech brewer’s Budweiser trademarks. The Czech government is preparing to sell Budvar before its term of office ends in 2010.
We can see the way that one is heading I reckon.
* Source - Wall St Journal
9 comments:
That would be a real disaster, but a natural evolution of globalisation.
Hmmm, Budvar's position isn't necessarily that bad, and my take on it was this spokesperson was being as non-commital as possible...
As Roger Protz already pointed out on his blog, InBev, and the newly-formed ABIB, already own a sizeable market share in the Czech Republic with Staropramen.
Buying Budvar, when and *IF* it eventually comes on the market, would mean coming under scrutiny of the European Commission (The Czech Republic being an EU country), something even big multinationals try and avoid (q.v. the way Heineken and Carlsberg made a joint bid for S&N announcing from the start who would get what in order to ward off preventive EU scrutiny), because they can get bitten pretty badly in the process.
Then, strategically speaking, A-B did not have a replacement global brand, and was all the more aggressive in its court fights for the Budweiser brand. One really got at times the impression A-B were thinking of Budvar's existence as a personal insult.
The new ABIB, where the A-B component is strongly diluted, is less likely to make such a personal matter of the Budweiser dispute, because they've got alternative global brands (think Stella Artois, Brahmam Staropramen, or even Labatts) they can push on markets where A-B lost the rights to the Budweiser brand.
Cheers !
Excellent points Lauren. There is obviously an alternative both strategically and tactically for ABIB, but it would involve quietly shelving the dispute and more unlikely, giving up on those areas where the dispute is still ongoing. Inbev now owns the lot, so of course it could do it, but it would be slapping its Yankee part of the company in the face, as well as admitting Budweiser is a busted flush as a global brand.
The EU bit is interesting, but again, not insurmountable as it all depends on market share compared to other brewers. In that scenario, they may not compare too badly.
It could go either way I think.
Re. the EU bit : AFAIK the European Commission moves as soons as one player is likely to reach one certain percentage of the market (30% or so ?), And there's the Czech competition authorities, who, under an EU regime, have more bite than they used to, and who do have their say as well.
ABIB will no doubt go on the litigation way with Budvar so as not to lose face completely, but I somehow doubt they'll put the same fanatical zeal in it as A-B did.
Nooooooooooooooooo!
Just a note here for perspective. A-B is already the USA importer for Budvar. Wot, Budvar's in the USA? Yest indeed it is, marketed under the made-up "Czechvar" moniker, but otherwise it's the exact same lager marketed as "Budvar Budweiser" elsewhere. One wonders if such accomodation would eventually be reached elsewhere.
I do know this, but while it might seem to offer a glimmer of hope, it would amount to capitulation rather than accommodation for Budvar to do as you say. I'd guess the USA was a bit of a "one off".I doubt if they'll do that elsewhere, no matter how convenient it might be.
Perhaps I am entirely biased living here in the Czech Republic, but Budvar should remain in Czech hands. The current government should put on hold any plans for privatisation, though I fear they won't for love of their Thatcherite policies.
Great blog. About the marketshare Staropramen + Budvar brewery would have around 20% marketshare in the Czech repblic. Pilsner Urguell has 44%. Does not look like a deal breaker to me.
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