Budvar plays down sale speculation

By Neil Merrett

- Last updated on GMT

Czech Brewer Budejovicky Budvar has hit out at speculation the
country's government is poised to sell the company as soon as

Petr Samc, spokesperson for the state-owned Budvar, told CEE-Foodindustry.com that speculation was a "media bubble" and no deal was yet on the cards.

His comments follow an announcement by Agriculture Minister Petr Gandalovic, whose department is in charge of Budvar, suggesting he would work with trade and finance ministers to prepare the company for privatisation.

The announcement may spark concerns about foreign influence in the Czech beer industry, which has long prided itself as one of the world's most traditional beer markets.

And, any deal to sell Budvar could mean the end of a long-standing dispute between Budvar and American giant Anheuser Busch (AB).

Both companies remain locked in several legal disputes over the use of the Budweiser name, and Gandalovic suggested the disagreement would need to be settled before any sale could be finalised.

"Everything is, of course, connected with the solving of the trademark dispute," he said.

But Budvar's Samc said that even if the dispute was solved, the government remain far from decided on the privatisation issue "A decision has not been made so far.

Only a few ministers said this week that the privatisation is possible in future .

"Our company is fully owned by the Czech state.

As a result, the decision about any possible sale must be made by the Czech government," he added.

With an apparent thaw in relations between Budvar and AB, a sale may now be moving a step nearer.

In January this year the companies announced a plan to work together on distributing Budejovivky's beer , known in the US as Czechvar, in North America.

Both parties added that the deal would not be used against each other in their ongoing global dispute over the right to use names including the words Bud and Budweiser.

It remained unclear whether AB would be interested in buying its old foe off the Czech government, should an opportunity arise.

Budvar has long argued it has the sole right to the Budweiser name because its beer is made in the town after which the beer is named.

Though the company holds around 380 trademarks in over 100 markets globally, it has had some troubles in securing rights to its name - particularly in the case of exclusivity.

In 2005, a Hungarian court ruled against Budvar, saying that the term "Bud" could not be protected as a geographic indicator (GI) because it was not a reference to the town the beer is made in, Ceske Budejovice.

The Austrian courts also ruled in favour of Anheuser-Busch, claiming that it could sell its Bud beer in the country, blocking Budvar's claim to sole rights on the trademark.

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