Thursday, 9 April 2009

Worrying times in Czech Republic

Heineken in line to
buy Czech Staropramen

There are strong rumours in Prague that the world beer giant, InBev AB, plans to off-load its Staropramen brewery in the Czech Republic, with Heineken poised to step in. Staropramen -- the Old Spring -- is second only to SABMiller's Pilsner Urquell group in the Czech Republic and is strongly positioned in export markets.
Staropramen was bought by Bass when the communist regime quietly folded its tent and walked away to numbered Swiss bank accounts. The brewery was privatised and Bass invested heavily in a new brewhouse and used its marketing muscle to sell the beer through its British pubs and in other export markets. When Bass quit brewing to run Holiday Inns, ownership of the brewery passed to the Belgian group Interbrew, which has since merged with Ambev of Brazil to become InBev, which subsequently bought Anheuser-Busch in the United States, owner of the world's biggest beer brand, Budweiser.
If Heineken buys Staropramen it will give the Dutch group a major presence in the Czech market. Heineken's style is to brew beer quickly and not bother with such niceties as long lagering times. When I visited its Polish subsidiary Zywiec last year I found that the entire brewing process -- from mashing to cold maturation -- for both Zywiec lager and Heineken was just 21 days. So we can expect the brewing process to be speeded up to Road Runner proportions at Staropramen.
But Heineken may cast its net wider. It has admitted it would be interested in buying Budweiser Budvar if the state-owned brewery in Ceske Budejovice were to be privatised. Heineken is a dab hand at closing plants and concentrating production into large units. If it buys Budvar at some time in the future we can expect the brewery to close with production moved to Prague. It would almost certainly spell the end for Budvar's famous 90-day lagering period.


Anonymous Laurent Mousson said...

Doesn't the news of AB-InBev possibly getting rid of Staropramen be a sign that they are still after Budvar ?

Buying Budvar, should it ever be put on the market (and pray it remains in public ownership) on top of Staropramen, AB-InBev would fall under scrutiny from the EU competition authorities, its Czech market share exceeding 30%...

But by offloading Staropramen first, AB-InBev finds intself in a position to buy Budvar without any trouble with the law... :o((

But why oh why should public ownership be such a bad thing and Budvar necessarily ever be put on the market ?...
Primator, HB, Weihenstephaner and Rothaus also are state-owned. And they all produce fine and fair-priced beer. Because, being geared towards still being alive and kicking in 20 or 50 years to bring money to the state, their development very much is is along-term-sustainable thing. Which means keeping one's customers through doing one's job properly.

9 April 2009 at 16:09  
Anonymous Anonymous said...

That's all doom-laden glass-is-half-empty speculation rather than actual bad news. In fact, a global giant off-loading one of its brands could be said to be good news.

Look on the bright side Protzy!

9 April 2009 at 17:30  
Blogger Johnny Norfolk said...

Its a great pity, so much is ruined by big organisations like the EU.

10 April 2009 at 17:36  
Anonymous StenJ said...

The Protected Geographical Indication Budějovické pivo (Budweiser Beer) is officially protected in the European Union and guarantees traditional location of origin. This should prevent it from being produced in places other than in České Budějovice.

13 April 2009 at 18:54  
Blogger Barm said...

StenJ, what makes you think that AB-Inbev would keep Budvar open at all, if they got their hands on it? Thus making regulations about where it can be produced moot.

13 April 2009 at 22:00  

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