The Precepts of Josef

The proud, stubborn brewmaster at the Czech Republic's Budweiser Budvar would be happy to accede to American calls for Czechvar on draft, but only on his terms

by Jack Curtin
Aug/Sept 2005

On a pleasantly cool afternoon in the Czech Republic last April, Budweiser Budvar master brewer Josef Tolar stood in front of the 300-meter deep artesian wells from which all the water used in making his beers is drawn, answering questions offered up by a six-pack of American journalists. We had come visiting in conjunction with a traveling party of U.S. distributors, under the auspices of Colorado-based Distinguished Brands International, which took over the importing of Tolar's beer into the U.S. late last year.

We were in Ceské Budejovice, located on the Vltava River south of Prague, a small town which has a brewing tradition dating back to 1265, when King Premysl Otakar II granted citizens the right to brew beer. Budweiser Budvar traces its lineage here to 1895, when Ceský Akciový Pivovar, the brewery's direct predecessor, starting brewing. Its beers are marketed in the U.S. under the Czechvar label because of a little dispute with Anheuser-Busch you may have heard about, over the use of the brand name "Budweiser" (see below).

Budvar, Czechvar…whatever name makes the lawyers happy…is one of the two best know beers from the beer-loving Czech Republic, second only to Pilsner Urquell. Budweiser Budvar, the last of the nation's state-owned breweries from the communist era which ended with the "Velvet Revolution" in 1989, is the third largest in the Republic, behind SABMiller (which owns the Pilsner Urquell, Gambrinus, Radegast and Velkopopovický Koze brands) and Staropramen (owned by InBev since 2000). Budvar is second in exports (t0 SABMiller), with a 25.3% share overall and a 30.5% share of lager exports. Indicative of its strength in that area is that it is the number one imported Czech lager and the sixth largest premium lager brand in the UK and the number two imported beer brand in Germany. Total sales break down to 48% domestic, 52% export.

Tolar, only the ninth brewer in the brewery's 100-year history, is the man responsible for all the beer produced here for sale at home and to nearly 60 countries around the world. As he speaks, he reveals the pride, caution and stubbornness which have marked his 40 years with Budvar, 20 as an apprentice to his predecessor and 20 in his current position.

Pride shows through when he reacted animatedly to a question about whether his beers sold in other countries are any different from those sold in the Czech Republic. "You taste the beers," he said emphatically, "and you'll see. The beer you get everywhere is brewed with the same ingredients, lagered in the same tanks, filled by the same machines. All the beer comes from one man and one place." This latter is a not so subtle dig at his major competitors, who are now brewing in several different locations, including Russia in the case of Pilsner Urquell.

Caution manifested itself when the discussion turned to the dark lager which the brewery introduced last year. This impressive beer was an immediate hit with our group at a luncheon held at the brewery prior to the tour of the facilities conducted by Tolar which has led us to this moment. "I was very skeptical when we first brewed it," he admitted, "because I thought it was something new that people would try only once. Instead, we sold twice the 5,000 hectoliters I expected we would and we are already selling it abroad in Finland, Sweden and other countries."

Selling abroad is where the stubbornness comes in. DBI, which took over importing bottled Czechvar to the U.S. last year, announced at the time that a pilot program to introduce a draft version would begin in early 2005. That never happened. Dodging and weaving, Tolar ignored the question of whether we'd see draft Czechvar any time soon the first few times it was asked that afternoon, but finally broached the subject on his own. "We would like to send draft beer to your country," he acknowledged, "and we are working on that. But we must be absolutely sure our beer is treated as it should be. We send draft to Germany, Austria, Russia, Poland, Italy, Spain and Great Britain, but we prefer bottles for more distant locations like Asia and America because it is easier to control the situation and keep the beer fresh."

For Tolar, freshness is not merely next to godliness, DBI president Jeff Coleman explained later, it supercedes it. "Josef is a man who is passionate about his beers. He considers himself the guardian of a national trust, and he has given us absolute mandates for how draft Czechvar is to be handled so that, if we do bring it into the U.S., the procedure will be unprecedented. Our freshness standards for an imported beer will be stricter than those used by Anheuser Busch. We won't be allowed to sell any beer that is over 90 days from shipping from the brewery, and to make that possible, accounts who want draft Czechvar will have to pre-order kegs two months in advance. Then, once the beer is tapped, they have to agree to turn over each keg in three days or less.

"Josef is absolutely convinced that his beer is good enough and will be successful enough to warrant all that special attention. Certainly any of our accounts who are willing to work with those restrictions will also have to believe that and really care about the beer…which is, of course, just what he wants."

Whatever Josef wants, Josef gets? We'll see.

* * * * * * * *

You never even called me by my name. That line from a classic country song might well serve as the anthem for the complicated, ongoing dispute between Budweiser Budvar and Anheuser-Busch. The town now known as Ceske Budejovice was populated by both Germans and Czechs and originally called by its German name, Budweis. Beers produced there were called Budweiser, as were the citizens; ethnic stress eventually changed all that land led to the adoption of the Czech name. Meanwhile, in the U.S., German immigrants Carl Conrad and Adolphus Busch first bottled and sold their Budweiser in 1876. They trademarked the name in 1878 and Anheuser-Busch took over the brand in 1883. As noted above, the brewery now known as Budweiser Budvar did not come into existence until 12 years after that.

Several beers bearing the name Budweiser were produced in the U.S. in the early 20th century, until AB began going to court to challenge the use of the name. Still, one competitor, the DuBois Brewing Company in western Pennsylvania, actually brewed and sold its own Budweiser from 1906 until 1972, prevailing over AB in court twice, until the brewery founder died. Long before that, in 1911, A-B and Budweiser Budvar, which contends that its historic location and lineage trump its competitor's patent, came to an agreement that they could both use the name; the Czechs even got to add "original" to their labels. Then, in 1939, following an abortive attempt to patent the name Budweiser in the U.S., Budvar signed a second agreement relinquishing all rights to the name on the North American continent for a modest payment from A-B. That agreement is still in effect today.

North America may be lost to them as a result, something that still obviously irks the Budvar folks, but the battle continues around the world. There was a brief hiatus when Anheuser-Busch approached Budvar in 1990 with a proposal to acquire a substantial stake in the brewery, That effort, including a moratorium on legal confrontations, lasted for four years. When Budvar unilaterally ended the negotiations in 1996 and it was back to the courts for both sides. The Czech brewery currently has some 380 trademarks registered in more than 100 countries and is battling what it calls "attacks" from the other side in more than 100 legal actions and administrative procedures in various patent offices. I think it's fair to say that the implied David vs. Goliath aspect of the ongoing conflict, not to mention Budvar's positioning itself as the protector of the "real" Budweiser, has probably been a competitive advantage for them in many countries and many courts.

Copyright (c) 2005 Jack Curtin

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