Bud & Bud: Now They’re Buds?

+ = ?

I saw this last Monday but was too busy with deadlines for paying gigs to do anything more than drop my jaw in amazement at the news. To say I was surprised would be an understatement. The vigor with which these two companies have battled one another is legendary. For them to unceremoniously bury the hatchet — and not into each other’s back — even in just the U.S. market defies logic. I can see why Anheuser-Busch would want the deal. To have a Bud with flavor and another import that’s been selling well, with even greater potential, is a no brainer for them.

But why Budějovický Budvar would be so eager is an entirely different matter. I have a hard time fathoming that it was simply the profit motive and the tantalizing carrot of making a killing here in the U.S. that drove their decision. Not to mention all of the people this move — along with the earlier InBev agreement — have put on the unemployment line. The very people who built all of these brands into ones that A-B would be interested in poaching are now left out in the cold, all of their hard work for naught. Many of the ones I know personally are great people, too, so it seems remarkably unfair.

I guess I just don’t want to believe that the principles Budvar has been arguing for so vehemently could be set aside so easily just for a wad of cash. There are currently something like 100 lawsuits going on in 30 countries around the globe over the brand names Bud, Budvar and Budweiser. A-B just lost an appeal in Portugal, so the disputes between the two companies are far from over. And generally speaking A-B has been the aggressor in a majority of the cases, at least as far as I’ve seen.

Here in the U.S., and other countries where A-B has prevailed in court decisions, Budvar, Budweis and Budweiser are labeled Czechvar, conveying none of the heritage of a beer brewed in the town of České Budějovice, which in German is Budweis. A-B has publicly acknowledged countless times that it was their inspiration for the beer they named Budweiser in 1876. Disputes began a century ago and have not subsided up through the present time. Even A-B’s press release acknowledges as much.

After nearly a century of disagreements in certain parts of the world over rights to the Budweiser name for their beers, Anheuser-Busch and Czech brewer Budejovicky Budvar have formed a historic alliance in which Anheuser-Busch will become the U.S. importer of Czechvar Premium Czech Lager, the two brewers jointly announced today.

The agreement gives Czechvar, currently sold in 30 states, access to Anheuser-Busch’s marketing and sales expertise and wide-reaching U.S. distribution network. It gives Anheuser-Busch another European import as part of an aggressive push into high-end beer categories that has led to alliances with Grolsch, Tiger, Kirin and most recently InBev, which added Stella Artois, Beck’s, Bass Pale Ale and other beers to its import portfolio.

The agreement does not impact existing litigation or trademark disputes between the two brewers in other countries, and they have agreed the partnership cannot be used to support either side in any trademark cases.

“After years of differences, this is a meaningful step for two great brewers to form a relationship that is good for both of our businesses,” said August A. Busch IV, president and chief executive officer of Anheuser-Busch Cos. Inc. “For Anheuser-Busch, it also represents an opportunity to enhance our import portfolio with a super-premium Czech import. Working with our family of wholesalers, we look forward to introducing Czechvar to a new audience of beer lovers.”

“At the same time, the agreement represents a historical turning point between our companies. We have managed to move away from discussions between lawyers and toward a practical dialog, which is going to be beneficial to both sides. Our corporation has therefore gained the best importer in the USA,” added Budejovicky Budvar’s CEO, Jiří Boček.

The agreement was effective Jan. 5. Terms were not disclosed.

Hmm. When a brewery with so much reason to feel a deep-seated animosity toward the world’s largest beer company can make nice for a fistful of ducats, what does that mean for the rest of the world’s breweries trying to sell their products here. Between the InBev brands (like Stella Artois), Grolsch, Tiger, Kirin, and now what many people refer to as “the real Budweiser,” Czechvar, this will make it increasingly difficult for other imported beers — and especially the smaller brands — to find a willing distributor to carry their products. Certainly no Bud distributor who wants to stay in Augie’s good graces would carry a non-A-B import. And that clutters the remaining distributors, especially where there’s only one other house that carries both Coors and Miller. Few distributors can carry everything presented them and that means less diversity in their territories, more so in states where it’s difficult or impossible for companies to self-distribute.

As usual, the losers will be you and me when we try to find that obscure import like Westmalle Tripel or Urthel Hop-It. Every time the highly efficient behemoth A-B distribution network adds another “official” beer to its portfolio, the available beers across the country become increasingly the same. If it keeps up like this, the only remaining diversity you’ll see at the local grocery store will be completely illusory. They’ll all be owned or have exclusive distribution agreements with a very small number of companies. And that will make it nearly impossible for a newcomer, whether an imported brewery or a local craft brewer, to find a spot on the shelf.