Czech beer David challenges American Goliath 28 Mar 2001Budweiser Budvar, the small Czech brewer based in Ceske Budejovice -- Budweis in German -- is launching its premium lager in the United States, home of its bitter rival Budweiser, the world's biggest beer brand owned by Anheuser-Busch.
A Bud by any other name would taste as sweet...
Exclusive by ROGER PROTZ
Budweiser Budvar, the small Czech brewer based in Ceske Budejovice -- Budweis in German -- is launching its premium lager in the United States, home of its bitter rival Budweiser, the world's biggest beer brand owned by Anheuser-Busch.
After a successful five-month trial, the beer labelled "Czechvar" in the US will now be rolled out from the initial five states of California, Florida, Illinois, New York, Massachusetts, Georgia and North Carolina.
In the rest of the world, the classic lager beer (5 per cent ABV) is known as Budweiser Budvar. But it cannot carry that name in the US as a result of an agreement dating from 1939 in which the Czech brewery agreed, under threat of punitive litigation from Anheuser-Busch, not to use the brand names Bud, Budweis or Budweiser in North American territory north of Panama.
The Czechs are still angry about an agreement forced on them at the very moment that Nazi forces were moving in to occupy Czechoslovakia on the eve of World War Two.
"The Czechvar brand name is derived from a combination of two words, Czech and pivovar, which means 'brewery'," said Budvar managing director Jiri Bocek. "The name was chosen to be understood by both Czechs and Americans.
"The Czechvar logo and brand are based on the same graphic design as the traditional beer from Ceske Budejovice. We chose the new export trade mark for the United States to avoid a conflict under trade mark law."
Sales Director Robert Chrt added: "Our decision to export to the US was based on the results of marketing studies that revealed that European beers are increasing market share and popularity there, and this rising tendency is a long-term affair.
"We started exporting last year. We wanted to try out the survey results in practice and so we opted for trial sales in California as the first phase of the export operation. The demand for the beer exceeded all expectations, not just among Czech and Slav minorities but also among other Americans."
The 1939 agreement even forbad the Czechs from using the name Budweiser Budvar National Corporation on labelling and packaging. As a result, Czechvar's label says it is brewed by BBNC. Even the town of origin can only appear on bottles and labels in "inconspicuous form".
*In Britain, Budweiser Budvar is now one of the top 100 imported beers even though little money is spent on promotions or advertising.
*Budweiser Budvar, still a state-owned corporation, brews 1 million hectolitres a year. Anheuser-Busch brews more beer a year than the whole of the British brewing industry.
*Budweiser Budvar is brewed to the strict demands of the medieval German Pure Beer Law -- the Reinheitsgebot -- which stipulates that only barley malt, hops, yeast and water can be used in the brewing process. After fermentation, the beer is lagered or aged for three months, one of the longest periods in the brewing world. Only Moravian malt, Saaz hops and pure water from a well 300 metres deep are used.
American Budweiser on the other hand lists rice before barley malt on its label. The beer has changed since it was first brewed in St Louis, Missouri, in 1875 when the label -- in German -- said it was made from Saaz hops and Bohemian malt. It is believed that the beer is "aged" for around 21 days.
The taste
Czech Budweiser Budvar has rich creamy malt, vanilla and gentle hop aroma and palate, with a hint of apple fruit from the house yeast.
American Budweiser, served ice cold, has no discernible aroma or flavour.
The legal battles
Anheuser-Busch and Budweiser Budvar have been locked in legal battles for more than a century. Britain is the only country in the world where both beers can be sold legally under the full name of Budweiser. Even so, Anheuser-Busch has repeatedly though unsuccessfuly taken action against Budweiser Budvar and its British importers, including an attempted criminal prosecution.
In the rest of the world, the company that registers its name first has the rights to use the full brand name and trade mark. In Italy, for example, the Czech beer is sold as Budweiser Budvar while the American version is labelled simply Bud.
Budweiser Budvar has registered nearly 380 trade marks in more than 101 countries. It is currently involved in close to 40 disputes in courts and more than 40 sets of administrative proceedings before patents offices with Anheuser-Busch. Budweiser Bduvar is exported to more than 60 countries in four continents, making it one of the most successful representatives of the Czech Republic abroad.
In recent years, Budvar has regained markets for the beer in France, Switzerland, Belgium, Israel, Russia, the Baltic region, Georgia, Romania, Croatia and Slovenia. It is now on sale in such new markets as Ireland, Finland, Denmark, Hong Kong and Japan.
For some years, Budweiser Budvar has been available in "extra territorials" in the United States, such as embassies or UN bodies. When a bottle of Budvar was alleged to have appeared at a private social function in Maryland, Anheuser-Busch filed a complaint with the International Trade Commission. An out-of-court settlement was reached, with both parties agreeing that Budvar could continue to import to "extra territorials" in the US under the Budweiser label.
The background
Budweiser has been an appellation for many centuries for beers brewed in the town of Budweis -- modern Ceske Budejovice -- in Bohemia, now a region of the modern Czech Republic. The town was founded in 1265 and by the 15th century there were 44 breweries there, making use of pure local spring water, malt from Moravia and hops from Zatec (Saaz in German).
In 1547, King Ferdinand I summoned a Budweis brewer to make beer for him, allowing the brewer to call his company the Royal Court Brewery of Bohemia and to declare his products as "the Beer of Kings". (Anheuser-Busch labels Budweiser "the King of Beers").
By the time of the Industrial Revolution, most of the small breweries were replaced by bigger concerns. In 1795 the Great and Small Breweries in the town merged to form the Citizen's Brewery. It came under German control and was renamed Burgerbrau. It exported to several European countries and the US using such labels as Budweiser Export Lager and Budweiser Export Bier."
Czech speakers in Budweis opened their own rival brewery in 1895 called Budejovicky Pivovary, shortened on labels to just Budvar. The rival Burgerbrau company changed its name to Samson and still brews under that name today. Budvar became the sole user of the Budweiser name and trade mark.
When the beer was exported to the US in the early part of the 20th century, distributed by Paul Ostruk of 120 West 42nd Street, New York NY, the label declared it was "imported Original Bohemian Budweiser Beer from Budweis City".
The founders of Anheuser-Busch, Eberhard Anheuser and Adolphus Busch, were German emigrants who took over a brewery in St Louis, Missouri, in 1864. At first they brewed dark Bavarian-style beers but soon switched to versions of pale Czech Pilsner and Budweiser. Budweiser was launched in 1876 and by the 1890s took on the title of "King of Beers".
Anheuser-Busch makes much of the fact that its Budweiser was brewed almost 20 years before Budvar came into operation. But for centuries Budweiser was an appellation or guarantee of origin in Bohemia and, as shown above, the Burgerbrau company exported under the name of Budweiser for most of the 19th century.
In its early years, Anheuser-Busch even acknowleged the authenticity of Czech beers. In a court case in 1880, Adolphus Busch said: "The process I have described is the process by which beer is made in Budweis to my best knowledge".
In 1898, in another court case, Bush testified as follows:
Question: Is it true that Anheuser-Busch manufactures a certain beer known as Budweiser?
Answer: Yes, sir.
Question: Is that beer made according to a particular process; if so, what process?
Answer: The Budweiser Beer is brewed according to the Budweiser Bohemian process.
In other words, Busch accepted his beer was based on a Bohemian model.
A short-lived agreement in August 1911 between the two companies stated: "The firm Budejovicky Budvar has not surrendered the right to use the word Budweiser...to denote the geographical origin of its beer products in the trade. The Anheuser-Busch Brewing Association also in the future marks with the words Budweiser its products...except the word 'Original' or similar denotation, being liable to mislead the public in the direction that beers products of Anheuser-Busch are manufacured at Budweis, Bohemia."
That agreement was shattered in 1939.
*Roger Protz is editor of the Good Beer Guide and Chairman of the British Guild of Beer Writers.
Published Online: 28 Mar 2001
Published in Print: 28 Mar 2001
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