The PBN Company
Unofficial translation

Anheuser-Busch, the producer of Bud beer, has announced its presence on the Russian market. Until recently, the world's largest brewer had no legal right to sell its beer in our country because the Bud trademark was registered to its Czech rival. Interestingly, the recent Russian partner of Czech Budweiser Co. will now sell the American beer.

According to the marketing agency Canadean, in 2000, Anheuser-Busch produced 159 million hectoliters of beer, while its closets rivals - Interbrew and Heineken - brewed 101 million and 72 million hectoliters, respectively. In 2002, the company earned about $14.3 billion. Two years ago, Anheuser-Busch controlled 48.4% of the U.S. domestic market. The company's major trademarks are Bud, Budweiser, Bud Light, Busch and Natural Light.

Until now, of all of the world's industrial giants only Anheuser-Busch had no presence on the Russian market. The problem was that all rights to Bud and Budweiser beer were registered to the Czech Budejovicky Budvar as early as 1989. The American company had a long-running legal dispute over this registration, which ended in May of 2001, when Rospatent's Appeals Chamber accepted arguments by Anheuser-Busch's lawyers and canceled the Czech company's Bud registration. As a result, the American company registered Bud in its name.

Six months later, Anheuser-Busch formulated its strategy for the Russian market. According to Terry Vogt, Anheuser-Busch's press secretary, at present the company does not intend to produce Bud or conduct large-scale advertising in Russia. The company will import Bud beer from the U.S. and sell it mostly at Moscow and Saint Petersburg bars and restaurants.

Having lost the monopoly over Bud beer, Budejovicky Budvar also lost its beer seller in Russia. Vedomosti has found that the Altimex Group, former exclusive partner of the Czech company, will now distribute Bud beer. A representative of one of Altimex' affiliates explains why they have chosen the Americans. "The Budejovice-based brewery has a certain capacity that is limited. And Bud is the No. 1 brand worldwide." He says they will start selling Bud beer in the nearest future.

The new Russian distributor of Czech Budweiser is Master Distribution Co. that sells a number of other imported beers, including Corona and Fosters. The company's Director Vladimir Zhosan is confident that the positive attitude of the Russian consumer to the Czech beer, the latter will remain popular and its sales will exceed those of other foreign brands. However, Budweiser's popularity, as well as that of other types of imported beer, is only relative in market terms. According to Business Analitika Co., in 2001, Budweiser holds a 0.02% share of the Russian market, while the share of all foreign beer is 0.31%.

[Sidebar] A 100-year War

The Budweiser trademark case is probably the oldest legal dispute involving intellectual property rights. The scramble began as early as 1911, when the Czech brewery Budejovicky Budvar entered the U.S. market and found out that this beer trademark had already been registered to the American Anheuser-Busch. The American company created their trademark in 1876, while the Czech brewery was built in 1895. Nevertheless, the Czech company asserted that Budweiser beer received its name from the German city of Budejovice, which is pronounced like Budweise. They claim the beer name is an appellation of origin like "champagne" or "cognac." This resulted in numerous court cases in various countries. To weaken the competition, the American company created the Bud trademark. However, the Czech company did not agree to that. At present, both companies are producing Budweiser and Bud beer.

The winner in this battle over trademarks varies depending on the legal peculiarities of different countries. It is Anheuser-Busch that possesses exclusive rights to both beer trademarks in the U.S. But England has recently recognized both companies as producers of Budweiser. So, both beers are co-existing on friendly terms in the UK.