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Budvar to sell?

July 2, 2003 - First came the news that the Czech government may be willing to sell the brewer Budejovicky Budvar, after which the country's press reported that big global players Scottish & Newcastle, Heineken, Interbrew, and Anheuser-Busch were all interested in the purchase. In another wave of privatization, reports have claimed that Budejovicky Budvar will be transformed into a joint-stock company in 2004. The company's book value is calculated at 3.5 billion Czech crowns ($128 million), and the value of its trademark at around 10 billion crowns.

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The Czech Finance Minister is apparently pushing for further privatization to raise badly needed funds for the state budget, and among the plans being studied is a proposal to sell Budvar. Certainly, the privatization move could potentially give Anheuser-Busch the ammunition it needs to settle a little matter once and for all, as the Czech brewer and its US rival Anheuser-Busch have been waging a long-running legal battle over the rights for the Budweiser and Bud trade names in different countries.

Matters aren't as simple as they might seem, though. The Czech Agriculture Ministry, which has management control of Budejovicky Budvar, remains opposed to the beer maker's possible privatization, maintaining that the sale is not in the Ministry's interest right now. The situation, however, could change in the future. The state could get more for Budejovicky Budvar than for the petrochemical giant Unipetrol. The brewery produced a total of 1.232 million hectoliters of beer in 2002, of which a half-million hectoliters were exported. Overall sales totaled 2.4 billion crowns, with a profit of 280 million crowns.


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