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Wednesday, February 9, 2000
Czech 'Budweiser' and St. Louis 'Budweiser' face off over name By John Poston In the late 19th century, the German-born Adolphus Busch returned to his prosperous homeland on a mission. Busch's adopted American city, St. Louis, needed a beer that would appeal to the country's teeming German immigrant population. Busch could think of nothing better than to give the beer a distinctly evocative, old country name: Budweiser. Little could he imagine the consequences of the choice. More than a century later, Anheuser-Busch, the American brewing, food and entertainment conglomorate that Busch helped to found, is locked in a lawyer-intensive, brand-war battle with this town's beloved local brew— Budejovicky Budvar. Budvar is known as — what else? — Budweiser. Now, Budvar wants to freely expand its "Budweiser" label and the other "Budweiser," the world's best-selling beer, says no way. It's Bud vs. Bud, with billions of dollars at stake. Budvar has rolled out linguistic artillery. "When Anheuser-Busch was looking for an advantageous name for beer in the second half of the 19th century, they didn't use the title Budweiser, but Budweiser Lager Bier, which is the German expression for Budejovice lager," says the Czech brewery's 42-year-old CEO Jiri Bocek, whose blazer and blue jeans seem lifted from a Pacific Northwest mircrobrewery. "'Budweiser' isn't a noun. The word is German and means 'Budejovice' as an adjective." In St. Louis, no one is buying Bocek's language lessons. They get a polite hearing, but little sympathy. "To us, it's a nice argument, but it's irrelevant," says Stephen Burrows, CEO and president of Anheuser-Busch International. "Just because I have a brewery in a town that was at one time -- and no longer -- called Budweis, gives me the right to the name? We just don't buy that argument. We don't believe it falls within the protection offered by geographical indication trademark law." In Ceske Budejovice, where beer has been brewed since long before Columbus grew into short pants, legal precedents mean nothing up against tradition. "Registered trademarks, as a system, emerged only in the second half of the 19th century," adds Bocek, who doesn't expect the dispute to end soon. "This has been going on since 1911," he says with a shrug and a smile. Mother of beer disputes Even though the issue hasn't been brewing all that long, Bud vs. Bud qualifies as the Mother of All Beer Disputes. Anheuser-Busch registered "Budweiser" as a trademark in 1876, some 20 years before the Budvar brewery was incorporated. In 125 years, the U.S. company has grown into a global goliath, whose branding clout rivals that of Coke. No one in St. Louis is sentimental about seeing Budvar grow. Still, Budvar won't yield. It insists the original "Budweiser" can refer only to beer that originally comes from Budweis, the German name for Ceske Budejovice and the name it went by during 300 years of Austrian domination of Bohemia, when German was the lingua franca. Brewing in Ceske Budejovice dates back even further, to just after the city's founding in 1265. For Ceske Budejovice beer lovers like Jiri and Vaclav Svoboda, the quarrel has powerful nationalistic overtones. "Budvar is crucial to the city and the country," says Jiri Svoboda after taking a swig of the golden nectar. "It's one of the most successful companies in the country, and its name associates Ceske Budejovice and the Czech Republic with quality wherever it goes." Czech-speaking brewers split from the city's German-dominated brewery and established Budvar in 1895 during the peak of the Czech National Revival. With German the official language until 1918, the brewers at Budvar felt compelled to dub their suds "Budweiser" beer. Various bilateral agreements beginning in 1911 kept the two Budweisers at peace. After the fall of communism in 1989, Anheuser-Busch tried to buy part of Budvar, which had been nationalized in 1946. Formal negotiations broke down in 1996 and the fight went into litigation with differing results. In Great Britain, for example, a court found that both breweries could use the name Budweiser. A Swiss court recently ruled that Bud was the domain of Budvar. The two brews still are battling over the use of "Budweiser," "Budweis" or even "Bud" on beer labels in more than 45 court cases around the world. Beyond national pride, Budvar worries about exports. Budvar produced 1.3 million hectoliters of beer in 1999 — enough for every man, woman and child in the Czech Republic to drink five frosty pints a day. The Svoboda brothers — regulars at the U Chromych pub just blocks from the Budvar brewery — probably wouldn't mind upping their consumption if exports stagnated, but foreign sales are vital to the company. It exported a third of its production last year, which helped it to a record pre-tax profit in 1999 — 480 million Kc ($13.3 million) — and made it the nation's top beer exporter. Attired in a long green coat and sporting a black beret and wire-rim glasses, Ales Dvorak, deputy brewmaster at Budvar, looks like the company's Che Guevara. But Dvorak, who is also a home brewer, isn't overly concerned by the dispute. His focus is fermentation, not litigation. "I went to Prague to study the food-processing industry, and beer is the best food," Dvorak says. Unlike Bocek, a Budejovice native, Dvorak is from nearby Cesky Krumlov. He's been at Budvar for a decade. According to Dvorak, Budvar's vital ingredient — water — comes from a well that taps a spring 300 meters (990 feet) below the brewery. In the boiling room, this water is mixed with malt to produce mash, which tastes like thin tea at this point and fills the boiling room with a smell similar to hay. This is where world-famous Zatec hops from northwest Bohemia, key for aroma and flavor, are added, Dvorak says. "Mass-produced American beers are a different kind of product," he adds. "They don't use enough hops for my taste." Importance of history And not only is the town, its water and its name important to the brewery; the brewery is vital to the town. Besides employing 550 inhabitants and stuffing local restaurants with thirsty tourists year round, the brewery contributes 1 million Kc ($28,000) annually in brewery-related merchandise that the city uses for publicity. Mayor Miroslav Tetter knows how much it matters. Comfortably ensconced in an office almost as airy and uncluttered as the South Bohemian countryside, Tetter discusses Budvar like a favorite nephew. "It's a big ad for the city," Tetter says, his white hair and grey suit sharp but demure like the tidy, prim facades on Premysl Otakar Square outside his office. "And it definitely draws in tourists." Though it is the brewery that draws heads of state and foreign delegations, the mayor argues that there is more to the city than Budweiser. "It's not possible to say that famous people wouldn't come to Budejovice if the brewery wasn't here," Tetter contends. According to the mayor, Ceske Budejovice is a geographical point of confluence for three cultures -- Southern Bohemian, Upper Austrian and Bavarian. Tetter himself could be an example. A Czech bearing a surname that hints at a mixed heritage, he is hospitable in the finest Bohemian tradition and yet also displays what some might say is a Teutonic stateliness and formality. Bearing out Tetter are historical marvels that can be found within a close radius of Ceske Budejovice. The medieval city of Cesky Krumlov — a United Nations world heritage site — and the Hluboka and Cervena Lhota castles are among the region's jewels. Add to this clean air, clean water, and of course fresh Budvar, and Tetter says you have the highest standard of living in the Czech Republic. The Czech government has no plans to privatize Budvar. It is too successful and prestigious. Also, there's no end in sight for Budvar's legal struggle with Anheuser-Busch. The Svoboda brothers don't worry about the brewery's future. "Regardless of what happens, Budvar will not lose its international standing," Jiri Svoboda says confidently. He doesn't worry about the possible consequences of the litigation now under way or the possibility that Budvar could one day be privatized, or even sold to foreigners. "Budvar survived the slump in the 1930s and a lot worse," Jiri Svoboda explains. Now blind, he is guided outside the pub by his brother to a bus stop where they will catch one of the electric buses that helps preserve the southern Bohemian freshness in the city's air. "But the best," he says, "would be that everything at the brewery stayed the way it is now." John Poston's e-mail address is jposton@praguepost.cz
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