The American company Anheuser-Bush (AB) cannot market its beer using their trademark name Budweiser in every country around the world. This is due to the fact that there is an European brewing company that uses the same trademark.
After Adolphus Bush immigrated to the United States, he got married into the Anheuser brewing family. He used and subsequently registered the name Budweiser as a trademark. A few years after Adolphus Bush did this, a new brewery was established in Budejovicky Budvar and its beer was officially named and registered as Budweiser. This Budweiser is considered by beers experts to be a greater beer than the American Budweiser. (College Term Paper)
Now days, AB has a domestic market share of 45 percent and 94 percent of its total production is being consumed domestically. Forced by decreasing demand in the domestic market, major competition by small breweries, imported beers and the increasingly scrutiny of the regulatory agencies, AB started to look abroad. Looking towards the international markets for expansion in the new century. AB faced a trademark problem in some Europeans countries, where it couldn’t market its beer under the Budweiser name and it had to use the Bud brand name instead.
In Great Britain the court of Appeal ruled that American brewery AB and Czech brewery Budejovicky Budvar might both use the Bud name in England. (Real Beer, 2/7/00).
More recently the Swiss courts ruled in favor of Budvar’s Budweiser, where the Swiss court banned AB from selling beer under the names of Budweiser or Bud. AB has to come up with a new name, but they can retain their logo design in order to ensure that they were still recognized in Swiss territory.
After the end of the communism in Czechoslovakia in 1989, AB saw this as the opportunity for them to invest in Budejovicky Budvar and end the trademark issue. But reality had proven to be different because the company has almost tripled its sales since the Czechs gained independence. (Business Journals, Inc. 2/28/01)
AB executives sent a letter to Czech officials offering to invest capital on the Budejovicky brewery, but the response that AB got back was not positive. One of the things that contributed to this response was that Czechs considered that the name Budweiser meant more than just a brand name or trademark, they believe that it denotes a geographic area and subsequently indicates were the products is from.
Secondly, the simple fact of privatization concerned the Czechs that already had a bad experience with the German carmaker company Volkswagen. Where Volkswagen promised some amount of money to the Czechs, but Volkswagen executives fail to provide. Besides this issue, the wages paid to the Czech’s factory were far below from the ones paid in the Germans’ factories.
The third factor was, like I mentioned before, that the Czechs consider that the American Budweiser to be far inferior to Budvar’s Budweiser.