European Beer Drinkers Denounce Proposed Sale of Budweiser Budvar

Last week, the European Beer Consumers Union (EBCU) held a press conference to denounce the idea of privatizing the Czech state-owned brewery, Budejovicky Budvar, brewer of the popular export beer, Budweiser Budvar (Czechvar in the United States). Basically, their only argument was that they feared that the quality of the beer may suffer as a result. And why? Because the brewery will clearly be purchased by the American brewing giant Anheuser-Busch, brewer of the beer that much of the world knows as Budweiser, within in the next year or two. They offered no evidence as to why the quality would suffer as result of Anheuser-Busch purchasing the brewery. Only inference.

What the EBCU fails to accept or comprehend is the fact that the Czech government stewards of Budweiser Budvar have already done much to ruin the beer. They export much of their government owned Czech grown Saaz hops to foreign brewers (mostly in Germany) and import foreign and inferior hops to brew their Budweiser Budvar. These government caretakers at one point had even taken to using synthetic hops in brewing their Budweiser Budvar, but thankfully that practice has stopped (so we've been told!). Budweiser Budvar, by Czech standards, stopped being a high quality premium beer years ago. Today, it's just expensive.

The assumption of the EBCU that Budejovicky Budvar will be purchased by Anheuser-Busch is a correct one, but any assumptions as to what will happen to the brewery afterwards is merely guesswork. Anheuser-Busch is keeping it cards close to its corporate vest, as well they should. Any speculation about the future of an Anheuser-Busch owned Budejovicky Budvar is just that, speculation.

Having said that, there is speculation founded in paranoia and speculation founded in common sense. It's paranoia to think that Anheuser-Busch is going to purchase the brewery in Ceske Budejovice and basically shut it down and start brewing the type of beer they sell in the United States under the Budweiser Budvar mark. It's common sense to hypothesize that Anheuser-Busch will modernize the brewery and perhaps improve the quality standards, seeing how Anheuser-Busch needs a true Czech premium brand in its lineup. When SABMiller purchased Pilsner Urquell, they not only modernized the brewery, they expanded it two-fold, and improved quality standards. When the corporation today known as InBev purchased the Prague based brewery, Staropramen, similar improvements were made. Why would Anheuser-Busch not do likewise?

And the answer to that question is that the Czech government won't let them. It is very possible that the privatization model will only allow a 30% share of the brewery to be sold at first. It will cede full management to the new minority owner, but will require a substantial investment in modernizing and expanding the brewery. If, after a few years, everyone is happy with the situation, an additional 20% will be sold. If, as more time passes, everyone continues to be happy with the new owner, then the final 50% will be sold.

The negotiations between the Czech government and Anheuser-Busch over the purchase of Budejovicky Budvar have probably been going on for fifteen years. Both sides have said little to the media. But I think it's pretty clear that the negotiations have been very complicated. And it is also pretty clear that Budweiser Budvar drinkers have very little to worry about.