The Real Thing

Bud vs Bud

Originally published in Crème de la Crème, January 2010

Louis White

Budweiser (St Louis) vs Budweiser (Budweiser) battle it out for the right to call their respective products "Budweiser". If the dispute was on whether or not to call the product "Beer" there is little doubt that the Czechs would win hands down.

Many wars last a lifetime or two. Even in resolution, there can still be underlying tension. Once lives have been lost, bitterness runs through family veins.

While no lives have been lost in this war, it has been battling on for more than a century and in most countries in the world. The tenacity of both sides is to be admired fighting over a subject that is dear to many a heart.

The fight is not over land or seas, buildings, an ancient heirloom or a patent that could determine the world’s future, but one of the most regularly consumed drinks on the planet – beer – or at least the naming rights of it.

The Czech Republic brewery Budejovicky Budvar, producers of Budweiser Budvar, and Anheuser-Busch InBev (St Louis-based Anheuser-Busch was bought by the Belgian brewer InBev in 2008 for $52 million), producers of American Budweiser, have been embroiled in a battle to secure exclusive rights to the name Budweiser for a century.

The only country in the world where both are currently entitled to use the Budweiser name is Britain, following a 16-year legal battle. Elsewhere, judgements have fallen in favour of one company or the other.

As recently as March 2009, a European court upheld a ruling denying Anheuser-Busch InBev the right to register the Budweiser name as a trademark for the European Union. Anheuser-Busch InBev applied for the EU trademark 13 years ago but the Czech brewer Budejovicky Budvar, which makes Budweiser Budvar, challenged the trademark, claiming it owns the rights because its beer comes from the Czech city of Ceske Budejovice, called Budweis in German.

In 2009 there were 17 trademark court disputes and patent-office proceedings still ongoing in more than 10 countries around the world, with the Czech brewer having successfully registered Budweiser and Bud as its protected trademark in more than 60 countries to date.

Remarkably though in 2007, both companies set aside their legal differences and joined forces in the USA. Anheuser-Busch agreed back then to import and sell the Czechvar brand (Budvar cannot use the Budweiser name in America) throughout the United States.

In terms of sheer volume, there is no comparison. The Czechs have roughly one per cent of the output of their American counterparts who produce in excess of 100 million barrels of beer every year and control more than half of the domestic market – double that of its nearest competitor. It is a David vs Goliath battle of epic proportions.

There will be more legal battles in the future. It is the longest running trademark dispute in the history of the world, and the longest running battle between two companies since records were kept. Who would have thought that the name of a beer would ever be that important?

The two Budweisers have their origins in different eras. The Czech town Ceske Budejovice was founded in 1265, and for many years was known by its German name, Budweis (the term Budweiser is a colloquialism, meaning ‘from Budweis’).

From the 15th century, Budweis became the home to the Royal Court Brewery of Bohemia (this is where the tag, ‘Beer of Kings’ originated) and the town’s distinctive malt brews became famous under the generic title of Budweiser.

It wasn’t, however, until 1895 that the Budweiser brewery was established in Ceske Budejovice, and by this time, Anheuser-Busch, a brewer in St Louis, Missouri, had already registered a crisp rice and barley malt blend under the same name in the New World. American Budweiser, created by German immigrant Adolphus Busch and Carl Conrad, was first served in 1876. It is on this fact that Anheuser-Busch bases its claim to the Budweiser name. Busch dubbed his company, ‘the king of beers’.

So, for a long time the dispute has been dubbed the battle between the ‘king of beers’ versus the ‘beer of kings’. Of course, using rice in the recipe meant that in Germany, at least, the American Budweiser couldn’t even be called “beer.” Germany’s purity laws were clear: beer could contain only barley, water and hops.

‘If you stick with the basics,’ said Steve Burrows, former president and CEO of Anheuser-Busch, before he departed with a $25 million golden handshake from the buyout by InBev, ‘we were using the name before they existed. We had the initiative to invest in the product and we are going to protect that. We spend tens of millions of dollars promoting the Budweiser name and they live off the marketing investment. We don’t mind them selling their beer under any other name besides Bud or Budweiser.’

The Czech perspective is rather different. ‘Any reasonable person must find this whole situation extraordinary when they consider that beer was brewed here at Ceske Budejovice or, in its German form, Budweis, as far back as the 13th century,’ Jiri Bocek, managing director of Budejovicky Budvar, said. ‘At that time, the only inhabitants of the Americas were the native American Indians, who were roaming the prairies without a thought of brewing or Europe.’

The two Buds first fell out of favour with each other at the start of the 20th century, and while peace looked possible after a delimitation agreement in 1911, where they decided to split the world amicably, with Budvar acknowledging Anheuser-Busch’s rights to use the Budweiser name without the word ‘original’ outside Europe.

In 1939, the Czech brewery conceded the rights to the name Bud, Budweis and Budweiser on North American territory, although the imminent invasion by Hitler may have influenced the agreement.

After World War II relations between the two breweries became hostile, as Budejovicky Budvar came under state control and the dispute has been raging ever since with every legal battle won by one brewery challenged by the other until the highest court in each land has made a final decision.

It has cost both companies millions upon millions of dollars in legal fees with no end in sight. As Josef Tolar, the second longest serving brew master at Budweiser Budvar said at his retirement after 44 years at the company, and 24 years in the top position: ‘It is difficult to organise a march of elephants and insects in the same direction. The insects get crushed, even if it isn’t intentional.’

Bud vs Bud as published in PDF form