The winds of change have blown over Budweiser
For too long for us to remember there has been talk in the Czech Republic about selling the Budvar brewery. Everybody with half a brain thought that the buyer would be Anheuser-Busch. Moreover, they believed they would have the Americans over a barrel. The reasoning went that in order to end the accursed trademark dispute, the Americans would be prepared to pay far more for Budvar than the brewer’s fair market value.
Alas, Anheuser-Busch is no more. It was swallowed by InBev two years ago. To all appearances AB-InBev is keener to pay down debt than fork out good money for Budweiser. This means that the list of potential bidders for Budvar could be fairly short and the rumoured price tag – EUR 1.2 billion for a 1.3 million hl brewery – far too high.
In 2009, Budvar’s beer sales dropped nearly 3 percent to 1. 27 million hl. Total Czech beer production declined 5. 9 percent to 18.8 million hl. The market is dominated by SABMiller (Pilsner Urquell), Heineken (Starobrno und Krusovice) and StarBev (Staropramen).
Apparently, the Czech government is desperate to lay its hands on Budvar’s retained earnings. Budvar is the Czech Republic’s fourth-largest brewery and, with net annual profits over the past five years averaging 200 million Kč (USD 10.4 million), is very much in the black.
However, such profits cannot currently be extracted and used toward the state budget, Czech media reported.
If Budvar were transformed from a state enterprise to a joint-stock company, the government could extract higher dividends and sell the company in the future if needed.
Still, the transformation is fraught with legal problems all to do with Budvar’s trademark, which would have to be transferred from the current state-owned company to the as yet to be set up joint stock company. While in the U.S. and the EU intellectual property rights can be transferred from one firm to another, this may not be the case in more exotic countries where Budvar holds the trademark to the Budweiser brand.
Until this legal quagmire has been solved, Budvar is unlikely to change hands.
