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Czech War: No Bud For You

Is the U.S. version of Budweiser slowly killing the original Czech brewery?

April 28, 2002

Is the U.S. version of Budweiser slowly killing the original Czech brewery?

In the United States, Budweiser is the largest-selling beer — and one of the best-known consumer brands as well. Its parent, Anheuser-Busch, makes sure of that, spending over $100 million a year on advertising.

But few Americans realize that the name of their favorite brew comes from a town in South Bohemia, in the Czech Republic. Budweis is the German name of Ceske Budejovice, a town that was founded in the 13th century. German and Czech brewers have been producing their specialty beer in the little town for the past 800 years.

In fact, a “Budweiser” merely denotes the kind of beer that is produced in Budweis — and reflecting the region’s traditional brewing methods. The resulting beer tastes not unlike a pilsner — the light, hoppy beer brewed in Plzen, another ancient Czech town world-renowned for its local brewery.

The famous Pilsner Urquell — which is the international trademark of the beer known in the Czech Republic as “Plzensky Prazdroj,” and also considered by some as the best beer in the world — is brewed in Plzen. But pilsner-style beers are also produced everywhere — just as plenty of cosmetics companies make their own colognes, and not just in Cologne, Germany.

Under normal circumstances, Budweiser could be just a generic type of beer. Or, with luck, it might have become a regional trademark, such as Burgundy or Chianti wines or Cognac brandy. That is, it might have been something considered indigenous to the region — and not authentic if it was produced anywhere else but in Ceske Budejovice.

Budvar, a brewery in Ceske Budejovice, has produced its version of Budweiser since 1895. Unfortunately, in 1876, two German immigrants to the United States, Eberhard Anheuser and Adolphus Busch, started brewing a Budweiser of their own in their St. Louis, Missouri, brewery.

The two immigrants chose the Budweiser name to capitalize on the region’s reputation. They also adopted the label “The King of Beers,” which comes from a title (The Beer of Kings) granted to the Czech Budweiser by 16th century Bohemian King Ferdinand I.

Of course, today’s American Budweiser has little in common with its Czech progenitor. To start with, Anheuser-Busch brewed over 26.2 million hectolitres of beer per year as of 1999. This compares to 1 million brewed by the Budvar brewery, which is considered a microbrewery by U.S. standards.

Moreover, American Budweiser can no more be called a regional beer than Coca-Cola can be called a Georgia soft drink. Today, its Budweiser is brewed at 12 breweries in the United States — and also at an Anheuser-Busch brewery located in the United Kingdom and in China. Another 10 local breweries around the world produce Budweiser under license from the company.

To be sure, America’s proverbial Joe Six-pack may know nothing about the existence of this Czech town and its original Budweiser.

But the Anheuser-Busch company certainly does. And its lawyers keep the Czech Budweiser solidly in their sights. Trademark litigation has been continuously pursued by both companies in various markets, and legal fees are no doubt weighing quite heavily on the small Czech brewery’s budget.

In some markets, the Czechs have scored victories. In Britain, famous for its sense of fair play, both beers are permitted to sell their competing products under the Budweiser brand. In Italy, the Czechs have gained the upper hand — and Anheuser-Busch has to be content with selling its beer as “Bud.”

In the United States, of course, the home team has scored a total victory. The Czech Budweiser has been able to enter the U.S. market at last, but only on the condition that it would change its name to the esoteric “Czechvar.” It is not permitted to display the words “Budweis” or “Budweiser” anywhere on its labels.

Incidentally, in twisting the Czech brewer’s arm, Anheuser-Busch cited a 1939 agreement under which Budvar agreed not to use the Budweiser brand in the United States. The date is significant. Hitler had invaded and annexed Czechoslovakia only the year before. Clearly, the Czechs had other things on their mind.

But the true cause of Anheuser-Busch’s relentless pursuit of the Czech rival may go well beyond the defense of its trademark.

In 1989, when Czechoslovakia’s communist government fell and the so-called Velvet Revolution promised the return of capitalism, among the first on the scene was the U.S. beer conglomerate, in a bid to buy Budvar.

Privatization in the Czech Republic has lagged behind, and Budvar is still owned by the country’s Ministry of Agriculture. The Czechs are wary of selling the brewery, which is regarded as part of their national heritage. They worry that Anheuser-Busch could easily adapt the formula and churn out aluminum cans of ice-cold Bud — and not the Czech variety.