The beginning of this week saw an important distribution deal between rival brewers Anheuser-Busch and Budejovicky Budvar, heralding a thaw in the century-long dispute over who owns the rights to the Budweiser trademark, and shocking industry observers in the process.
Anheuser-Busch will now distribute Budejovicky Budvar's rival Budweiser in the US; however, Budvar's Budweiser will remain under the Czechvar name in the US, due to the ongoing trademark dispute.
Both firms claim a historical right to use the famous Budweiser brand. Anheuser-Busch, the US's biggest brewer, argues that it holds the right to the name as it first started brewing Budweiser in 1876, 19 years before its Czech rival Budejovicky Budvar was founded in 1895. However, Budejovicky Budvar, counters that its Budweiser is simply named after the town of Ceske Budejovice (called Budweis in German) where it runs its brewery.
Under the new agreement, Budejovicky, which is to be sold in 30 states, will have access to Anheuser-Busch's vast US sales and distribution network, while Anheuser-Busch will add another European import to its fast-growing portfolio. It already imports Grolsch, Tiger, Kirin and Bass, among other higher-end brands.
‘We have managed to move away from discussions between lawyers and toward a practical dialogue, which is going to be beneficial to both sides,’ said Budejovicky Budvar chief Jiri Bocek.
Anheuser-Busch has seen sales flag as consumers turn to craft beers and foreign beers and this agreement with Budvar is part of its wider strategy to break into the foreign beer market.
'It's too early to tell how successful Anheuser-Busch's import strategy will be', said Benj Steinman, publisher of Beer Marketer's Insights.
'Czechvar is such a small-selling import it likely won't have a big affect on Anheuser-Busch's sales', Steinman said. 'The deal is more significant in signaling the two companies might be finding common ground to end their larger dispute.'