Czechvar US Sales Exceed Expectations

9.5.2002

Czechvar marketed in 14 US states as well as in Canada

Prague, 9 April 2002 - Budějovický Budvar considerably exceeded planned sales figures during the initial year of officially marketing its premium lager ‘Czechvar’ in the United States.  It exported as much as some 8.5 thousand hectolitres  of the Czechvar beer in 2001.

“We are extremely glad for the commercial success that Czechvar scored in the United States.  We are the more happy that the sales took place under a new, specially designed brand name”, says Sales Manager Robert Chrt of Budějovický Budvar.  “Initially, we wanted to sell some 3000 hectolitres.  The high demand for Czechvar, however, exceeded our expectations.  Therefore, we would like to export anything between 13 and 15 thousand hectolitres in the USA this year.”

Budějovický Budvar started to trial export its Czechvar premium lager in the United States in the autumn of 2000.  Officially, it launched its exports at the end of March 2001.  In the summer of 2001, Czechvar went to Canada for the first time.  At present, it is sold in Ontario and British Columbia.

“Czechvar has won significant acclaim in the North American markets both among consumers and dealers.  This is supported by demand reported also from some regions in the US where Czechvar has not been sold so far.  Also, we have been pleased by the constant positive response received in the form of encouraging news sent via e-mail”, says Ms Jana Kubištová, of the Exports Department of Budějovický Budvar.  “Due to such high interest we may want to expand our exports to several other US states this year and also to three more provinces in Canada”, she added.

Under the existing 1939 agreement, Budějovický Budvar is not allowed to use its traditional export brand names of ‘Budweiser Budvar’ in the United States.  This agreement was executed under an imminent threat that Anheuser-Busch would launch extensive litigation in the US, and also under distress resulting from the then forthcoming occupation of this country by Nazi Germany and the outbreak of World War II.  There and then, Budějovický Budvar was forced to give up the right to use the trademarks ‘Bud’, ‘Budweis’ and ‘Budweiser’ in North America, i.e., north of Panama.  The agreement also covers the use of the business name of “Budějovický Budvar národní podnik” (Budějovický Budvar, National Corporation) that should not be mentioned on labels or in any other promotional materials.  Therefore, the company has decided to register its export name of ‘B.B.N.P.’ made up of the initials of its full name, and also to invent a new export brand name for its premium lager: “Czechvar”.  Actually, even the name of the beer’s home town, České Budějovice, may only appear in an “inconspicuous manner” on the labels and boxes, to prevent litigation for a breach of the 1939 agreement.

A brief history of the dispute between Budějovický Budvar and Anheuser-Busch:

The dispute between the Budějovice brewery and Anheuser-Busch concerning the trademark ‘Budweiser’ has been going on for almost 100 years.  As early as in the past century, Anheuser-Busch decided to exploit the renown of the brew made in Budějovice and imitate the Budějovice lager in the United States.  The first attempt to settle the variation between the two companies was in an agreement of 1911 in which ‘Český akciový pivovar’, the predecessor of Budějovický Budvar, agreed that Anheuser-Busch might use the ‘Budweiser’ trademark, but should be prevented from using the word ‘Original’ so that consumers were not misled into believing that the Anheuser-Busch beer came from the city of Budějovice in Bohemia.  In this agreement, too, Budvar’s predecessor reserved the right to use the brand name ‘Budweiser’ in relation to its products globally, i.e., including the United States.

The disputes escalated when ‘Český akciový pivovar’, in keeping with the 1911 agreement, registered its trademark “Imported Original Bohemian Budweiser Beer from Budweis City” in the US on 10 August 1937.  This trademark was used on labels in the USA between 1934 and 1938, and according to available information, the beer proved to be a very successful export commodity.  In 1938, Anheuser-Busch began anew to exert pressure and place demands under which the Budějovice brewery was expected to give up globally the right to describe its product with any terms containing the words “Bud”, “Budweiser”, and “Budweis”, save for Europe.  The brewery described the demands as outright insulting and refused to consider them at all.  It was not before 1939 that the above mentioned agreement, unreservedly disadvantageous for the Budějovice brewery, was executed.  It was signed a mere one week before Germany annexed the Czechoslovak borderlands, and Europe found itself on the brink of the Second World War.