Beer Background

Budvar boss faces the axe

Added: Tuesday, February 7th 2012

The future of Budweiser Budvar is once again in the balance as the Czech media reports that the government is planning to sack the brewery's legendary manager, Jiri Bocek. Bocek has worked for Budvar for 21 years and has been a fierce defender of its independence.

But according to the English-language newspaper Czech Position, the press is full of rumours that the Ministry of Agriculture is preparing to sack Bocek, even though he is responsible for doubling sales and profits of the state-owned brewery and trebling production.

The business daily Hospodarske Noviny said said 54 year-old Bocek's dismissal by the Minister of Agriculture Petr Bendl is imminent. Bendl is a member of the current right-of-centre government, dominated by the Civil Democrats, that wishes to turn Budvar into a joint stock company in preparation for privatisation. The most likely outcome is that Budvar would be taken over by a global western brewer, and one of the bidders could be AB InBev, owner of the American brand Budweiser. The two breweries have been locked in a bitter trademark battle for more than a century.

The Czech government is keen to settle the trademark dispute, which costs a fortune in legal fees, and one of the rumoured criticisms of Jiri Bocek is that he has been slow to negotiate a deal with AB InBev. The Ministry of Agriculture has also launched a special audit of Budvar's accounts, which is seen as further black propaganda about Bocek's managerial performance. The ministry has also placed a lawyer, Tomas Jindra, a government supporter, on Budvar's company board.

The brewery hit back against media speculation by pointing out that a top legal firm, acting for the Ministry of Agriculture, had found no fault in Budvar's handling of the trademark dispute.

Support for Budvar has come from another member of the brewery board, Jiri Zimola, who is also regional governor for South Bohemia and a leading member of the opposition Social Democrats. South Bohemia includes Budvar's home town of Ceske Budejovice. Zimola has demanded firm guarantees from Prime Minister Petr Necas that the brewery will remain in state hands.

He argues that the brewery should stay in government control because it is profitable. "I don't get the impression we're so rich that we can frivolously get rid of a well-functioning, prosperous firm," he said. He added that he will call a referendum in South Bohemia on the future of Budvar if the government does not propose a law safeguarding the brewery from foreign takeover. He admits such a referendum would carry no legal weight "but I think it necessary for the government to see what the people of the region think about it."