Feud Over Budweiser Name Put on Ice

CESKE BUDEJOVICE, Czech Republic -- The world's largest brewer and its tiny Czech cousin have agreed to let the foam settle for another three months in their protracted battle over the use of the brand name Budweiser. The Czech state-owned brewery, Budejovicky Budvar N.P., said last week it had agreed with U.S.-based Anheuser-Busch Cos. Inc. to extend a moratorium on legal action in a trademark infringement row which shows little sign of coming to a head. The agreement, made while the American brewer is close to taking its own stake in Budvar, effectively continues to block Busch's flagship brand, Budweiser, from being sold in key markets in Europe -- mainly Germany and Austria. Meanwhile the Czech version of the brew -- the roots of which span centuries when Ceske Budejovice was known by its German name, Budweis -- cannot be sold in North America. "Both sides have a certain number of sensitive points where it's difficult to find a compromise," said Budvar general director Jiri Bocek. Busch officials were not immediately available for comment. The president of Busch's international arm, Steve Burrows, was quoted in published reports last week as saying that a final resolution to the years-long row was only months away. Both brewers have staked their claim to the Budweiser trademark using legal and historical arguments. Busch established the name Budweiser in the U.S. when German immigrants founded their St. Louis family brewery in the latter part of last century, while the Czechs claim they had been using the name long before Columbus discovered the New World, even though they did not legally register it until the 1920s. The trademark row has been weaved into the debate over how the Czech government should privatize the Budvar brewery, a company several politicians and commentators have called part of the "Czech Family Silver." In January, the Czech government awarded Busch the exclusive right to negotiate for a minority stake in Budvar as part of the privatization of the brewery, which claims to have its roots when beer-making in Budweis was licenced by Bohemian King Otakar II in 1256. But Bocek said seven privatization projects have been presented to the Czech Privatization Ministry, and all have been rejected. No official reasons have been given. "The whole issue of privatization is taken as very sensitive in the Czech Republic," Bocek said. Still, Busch has used its exclusive position to launch a public image campaign -- the likes of which had not been seen in a country still shaking off 40 years of communism -- to convince Czechs that their intentions are earnest. Busch has opened a representative office in Ceske Budejovice, a cultural center providing free English courses to citizens and management advice to budding entrepreneurs, while newspaper adverts tout the possibilities of future cooperation. "Basically Anheuser-Busch, through its public relations, is trying to create the image of a serious strategic partner," Bocek said. "Sometimes the business direction is lost a little and it's more emotional -- to sell or not to sell -- that's what is connected to this" public relations campaign. Many Czechs are not convinced that a partnership with their big American cousin might lead to better things. There is a widespread fear in Czech bars that the Americans would change Budvar's distinctively heavy Czech flavor for a lighter style more popular in the United States.