Friday, 18 January 2008

Budvar records increased sales

Budvar records increased
sales at home and abroad

The notion that state-owned companies can't compete successfully in the private sector has been scotched by the success of Budweiser Budvar in the Czech Republic. The brewery -- the last to remain in state hands since the fall of the old communist regime -- has posted a 9% increase in domestic sales and a 3% rise in exports.
Budvar's success is all the more remarkable when you consider that the Czech beer market is dominated by two global giants. SABMiller, which owns Pilsner Urquell and Gambrinus, and InBev, the world's biggest brewing group, which owns Prague Breweries, have invested massively in their brands. They have built branded pubs and restaurants, and discounted their beers heavily.
Budvar suffered as a result for a few years but has now bounced back in the most encouraging manner. For from being hidebound or conservative -- the usual charges made against nationalised companies -- it has been innovative and has introduced new brands, including the acclaimed Budvar Dark.
And year after year it tops the poll in the annual awards -- chosen by beer lovers -- in the competition organised by the newspaper Pivni Kyry (Beer Courier).
It seems plans to privatise Budvar are on hold. The current Czech government, a right-of-centre coalitition, announced last year it would turn the brewery into a Joint Stock Company, the first step towards a sell-off. But it now says it won't be able to privatise the company until 2010, by which time there will have been a general election. The experience since the restoration of democracy is that a right-of-centre government is always followed by a left-of-centre one, which is unlikely to privatise Budvar.


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