Budvar Sale Update

There’s a new twist in the Budvar sale story. As most readers of these pages are probably already well aware, Budějovický Budvar (pictured above) is the last brewery to remain Czech national property and its privatization seems to be proposed about every two years. Due to Budvar’s claim to the name Budweiser and its numerous ongoing legal battles with Anheuser-Busch on the issue, many argue that Budvar should not ever be privatized, lest it be bought by the maker of American Budweiser and shuttered — or worse, forced to brew bad beer.

Last month I mentioned that the current Czech government has announced a tender for its legal advisor in the sale of Budvar — a first step toward privatization. Yesterday, Forbes reported that the proposed sale of Budvar will not take place before the current government leaves office in 2010, contrary to what was suggested in December.

In this story, Czech Agriculture Minister Petr Gandalovič is quoted as saying that the sale won’t take place in 2008, but it’s “still a question” if the sale will take place in 2009, the first half of which is scheduled for the Czech Republic to hold the EU presidency. (2010, of course, will be dedicated to the national elections. Budvar might or might not be the country’s favorite beer, but many, many people here do take pride in the brewery and its history, and selling off a prized possession could end up being a very unpopular issue with voters. There’s a reason governments tend to do things like this right after they get into office, not right before elections.)

However, follow-up reports in today’s Lidové noviny and Hospodářské noviny newspapers confirm that the sale will be left to the next government. As Prague Daily Monitor’s English-language Czech press review explains, Gandalovič said his ministry plans only to transform the company into a joint-stock company in preparation of future privatization. For now, the joint-stock conversion is no big deal, as the Czech government will still own 100% of the stock. What happens after the elections of 2010 is up in the air.

Incidentally, Budvar is currently doing very well indeed: Budvar’s production climbed 8.7% in 2007, according to CNNMoney. Domestic sales climbed by 11% and exports rose 5.8% to 587,000 hectoliters, the highest export figure yet, aided in part due to an agreement last year by which, ironically, Anheuser-Busch began to distribute Budvar in the United States, though only under Budvar’s alternate name of Czechvar.

Yeah right, sell it off. If Budvar would only deign to add a polotmavý and a wheat beer to its excellent lineup, it just might take over the world.