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This Bud’s for You!

December 20, 2012

budweiser_budvarMost Americans likely have no idea, but the battle for the rights to the name “Budweiser” has been going on for over a century. The name originated in the town of  České Budějovice in the Czech Republic. The brewing tradition in Budějovice, or in Budweis as the city is known in German, dates back some 700 years, to when the city was home the imperial brewery of the Holy Roman Empire. By the middle of the nineteenth century, Budweiser (beer from Budweis) and Pilsner (beer from Plzeň, also in the Czech Republic) were two of the most well-known kinds of lagers.

Today, two companies lay claim to the name “Budweiser:” Budweiser (Anheuser-Busch, now InBev), and Budweiser Budvar. Both breweries have been in operation since the nineteenth century, and the dispute over the name is longstanding.

In 1907, the two companies reached an agreement that worked for some time. Under the agreement, the U.S.-based Anheuser-Busch had exclusive use of the Budweiser name in North America but agreed to refrain from marketing its products under that name in European markets. Thus, an Anheuser-Busch Budweiser was “Bud” in France and “Anheuser-Busch B” in Austria and Germany.  Budweiser Budvar agreed to the reverse, marketing their beer under the Budweiser brand in Europe and using the name Czechvar in North American markets.

But increasingly integrated global markets have caused the agreement to begin to break down. Between 2000 and 2011, 124 disputes between the companies were adjudicated. While dwarfed by InBev in terms of market size, Budvar has won 88 of the 124 cases and continues to hold exclusive rights to the name in 68 countries around the world, including most of Europe, plus key Asian markets like China and Japan. On Tuesday, talks between the two once again collapsed.

Setting aside the longstanding agreement for a moment, Budvar’s claim is an interesting one. According to Budvar, the name Budweiser should be considered a geographical indicator under the World Trade Organizations’ Trade-Related Intellectual Property Rights Agreement. Geographical indicators signal product names that are derived from a specific location, such as Champagne and Prosciutto di Parma. Once registered, geographical indicators, or GIs, are protected. However, to be designed at a GI, a state must lay claim to the name before that name is in widespread use. InBev asserts that their longstanding use of the name Budweiser undermines Budvar’s ability to claim it as a geographical indicator.

In some countries, like the United Kingdom, both countries are currently selling their beer under the Budweiser name. The current situation in the U.K. is the result of a 2000 court decision which ruled that both companies could use the name. InBev has expressed concern that the coexistence of the two brands under the same name might create confusion for consumers. But the AP story concludes on a hopeful note, quoting Iain Loe, former research manager for Britain’s Campaign for Real Ale, who asserted that there was little reason for concern, as Budvar as “a full bodied taste” while “AB’s Budweiser has little taste, or in the words of AB InBev, a clean taste….Consumers know which beer is which.”

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