Wednesday, 4 June 2008

Battle for Bud

Giant merger could
help the other Bud

As the struggle for control of Anheuser-Busch gathers pace -- with both InBev and SABMiller considering bids -- the concentration of power among global brewers could ironically be a lifeline for Budweiser Budvar. The small Czech brewery has been locked in a legal dispute with A-B for more than a century over the Budweiser trade mark. A-B is seen as the only logical future owner of Budvar when the state-owned Czech brewery is privatised, as no other other company would want to fight A-B in the courts.
But if A-B is taken over -- and InBev is reported to be prepared to raise its offer to $50 billion -- the legal battle might change dramatically. Neither InBev or SABMiller, if one becomes owner of American Budweiser, would want to pursue a costly legal battle over the trade mark. And any plans for either group to buy Budvar could be thwarted by Czech anti-trust laws. Both InBev and SABMiller are already major players in the Czech brewing industry: InBev owns Prague Breweries, whose leading brand is Staropramen, while SABMiller controls the leading Czech brands Pilsner Urquell, Gambrinus and Velke Popovice (Kozel). It is highly unlikely that the government would allow either group to extend its domination of the brewing industry, especially as the current fragile right-wing coalition is almost certain to be replaced by a left-of-centre regime after the next election.

Otherwise, it's bad news all round
On every other front, however, this jousting for control of the world's leading beer brands is bad news. The top five global brewers already account for two-thirds of the world beer market and this could rise to 85% if A-B succumbs.
And that would not be the end of the takeover trail. If InBev is successful in its bid for A-B, SABMiller would want to rival its power and scope. Market analysts are already suggesting that SABMiller would make a bid for giant US-Canadian group Molson Coors.


Blogger Unknown said...

It is an interesting struggle indeed. I have never been happy that A-B has the Budweiser tag because it won in a court.

InBev and SAB are becoming a bit too big for their boots. It would be nice to see a new conglomerate of, say, Czech brewers coming through and taking the world by storm. But then again, I enjoy rooting for the little guy. :-)

4 June 2008 at 10:46  
Anonymous Anonymous said...

"Anti-trust"? This is Europe. It's called competition law, old bean.

7 June 2008 at 11:22  

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