What’s in a name? Quite a bit when AB Inbev, the world’s biggest brewer, is trying to build international cachet for its marquee brand.
AB InBev is being cornered into calling its flagship beer “Bud” instead of Budweiser in Italy, after an Italian court ruled in favor of Czech-based brewer Budweiser Budejovicky Budvar NP. The bad news is compounded by the fact that Budejovicky, which had previously been forced to stop selling its Budweiser Budvar lager in Italy because of trademark infringements, is now being allowed to re-enter the market.
The court ruling is a big disappointment for AB InBev, which first filed a lawsuit against the Italian importers of Budvar in 2001, but it’s far from the only battle being waged between the two beer companies. It’s part of a war that stretches back more than 100 years, when Adolphus Busch, the founder of US-based Anheuser-Busch (which Belgian beer company InBev acquired back in 2008), named his US-made beer after Budweis, the German name of an old Czech city famous for its beer.
Budweiser Budejovicky Budvar, however, actually comes from Budweis, and has sold a beer it calls Budweiser Budvar lager for decades. In many countries, including the United States, Canada, Mexico, Panama, Brazil and Peru, it has had to call its beer by another name: “Czechvar.” That’s even though Budvar has been around for nearly as long as Anheuser-Busch’s hallmark beer—the Czech brewer was founded in 1895, only 19 years after the US-based company first introduced Budweiser.
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Budejovicky and AB InBev have been fighting for decades, which has resulted in outstanding trademark disputes in more than 20 countries around the world, according to the Wall Street Journal (paywall). AB InBev lost a similar fight in the UK in 2011, when it filed a lawsuit against Budejovicky for using the Budweiser trademark. European Union judges ruled that both companies were allowed to use the label, claiming that consumers are perfectly capable of distinguishing between the two. The same thing happened in both Germany and Austria in 2010.
The fist-swinging got so out of hand this past spring that AB InBev was rumored to be considering acquiring Budejovicky, before the company promptly stepped forward and dispelled the gossip.
The ongoing global dispute has stunted AB InBev’s plans to build its Budweiser brand around the globe, which is a problem for it considering the beer’s waning popularity at home; sales fell 4% in the first quarter of 2013, and have continued to tumble. Once the king of US beers, Budweiser has seen its annual sales in the US fall for two dozen years straight, allowing its lighter version, Bud Light, and competitor, Coors Light, to overtake it. Budweiser is currently the third-best selling beer in the US, but accounts for less than 2% of international beer sales.