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Czech 'victory' in new Battle of the Buds

Added: Thursday, July 5th 2012

The British Court of Appeal has backed the Czech brewer Budweiser Budvar in the latest round of the long-running dispute with global giant AB InBev, owner of the rival American Budweiser brand. On 3 July, the court gave its judgement that “all but guarantees Budvar’s right to maintain its Budweiser trademark in the UK,” the Czech brewery based in Ceské Budejovice said.

The decision allows both companies to simultaneously hold the trademark in the UK, which the Court of Appeal initially ruled in 2000. In 2005, Anheuser Busch – as the company was then called prior to the merger with InBev – started legal action in Britain to invalidate Budvar’s ownership of the Budweiser name.

“The 3 July judgement allows the trademark register to reflect the reality of the situation in the market place – that both brands co-exist and have done so for many years,” Mark Blair, the lawyer acting for Budvar, said.

A spokesman for AB InBev said: “While we are disappointed with the ruling of the Court of Appeal, the decision neither impacts our Budweiser trademark rights in the UK, which remain strong and unchallenged, nor our Budweiser business, which continues to show strong development opportunities.”

In September 2011, the European Court of Justice ruled that both breweries could use the trademark in Britain “as consumers are well aware of the difference between the two beers.”

As a sign of the continued tension between the two companies, Budvar announced that with effect from 6 July it’s ending the contract with AB InBev to import and distribute the Czech beer in North America under the brand name Czechvar.

The contract was signed in 2007 when Anheuser Busch wanted to take advantage of the increasing demand for premium imported beers in the United States. Budvar accepted AB’s proposal that was outside the continuing trademark dispute.

But when AB merged with InBev in 2008, the policy changed and the new company showed less interest in imported beers. Budvar says AB InBev did not meet the agreed business targets and as a result breached the terms of the contract.

Budvar has now teamed up with United States Beverages (USB) of Stamford, Connecticut, to import the Czech beer. Budvar says it expects sales in the U.S. to increase dramatically to 9,000 hectolitres a year. USB has a strong sales network throughout the country.

The British arm of the Czech brewery, Budvar UK, plans to create an “A Team” of publicans who will stock Budvar Yeast Beer, the unfiltered and unpasteurised version of the golden lager. The aim is to establish 50 outlets throughout the country that will stock the beer.

Budvar UK sales director Joe Laventure says consumer interest in the beer has exceeded all expectations. “Because it’s unpasteurised, it’s a beer that needs an expert touch,” he says.

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