Budweiser's darker, more flavorful twin

For more than 100 years, what the world's beer drinkers recognized as Budweiser depended largely on where they were standing. That won't change anytime soon now that talks over exclusive use of the name have collapsed.

Global megabrewer Anheuser-Busch InBev (BUD) wants the world to know Budweiser as the U.S. does: A pale, Clydesdale-pulled, multi-packaged light lager that permeates every aspect of adult culture and is nearly inescapable if you're attempting to buy a beer. The Budejovicky Budvar brewery in Ceske Budejovice, Czech Republic, wants to keep its Budweiser name associated with its town, its brewery and its darker, more flavorful lager. The former wants the name for brand consistency, the latter says the name is the primary reason it exists.

Before exclusivity talks broke down, the courts have been siding with the relatively little Czech brewery. Though Budejovicky Budvar produced 279 million pints of Budweiser last year to A-B's 73.9 billion and brought in revenue of $101 million in 2011 compared to InBev's $39 billion, Budvar has won 88 of 124 lawsuits against Anheuser-Busch over the past 11 years. Though A-B InBev has the rights to the Budweiser name in roughly 80 countries, Budvar still has exclusive rights to Budweiser in 68 countries, mostly in Europe, including beer-loving Germany.

So how did we get here? Much as the U.S. embraced baseball when the rest of the world took up soccer, history's disparate paths on each side of the Atlantic made Budweiser mean many things to many people. Budweiser was born in 1795 at the Budweiser Burgerbrau brewery in Ceske Budejovice and hit U.S. shores as an export in the early 1870s. The founders of Anheuser-Busch liked the style so much that they built their own beer around it and began selling it as Budweiser in the U.S. in 1876.

That became a bit of a problem in 1895, when Budweiser Burgerbrau became a house brewery for German royals and Budejovice's citzens founded Budejovicky Budvar to keep the Budweiser name in town. International legal wrangling between the three brewers began in 1906, but came to a settlements in 1907 and 1939 that allowed Anheuser-Busch to use the Budweiser name in North and Central America.

A-B has never been happy about this, but has been thwarted in various attempts at using the Budweiser name exclusively. In 2000, Britain allowed both A-B and Budvar to use the Budweiser trademark om the United Kingdom, stating that drinkers could see the clear difference between the two. That decision was upheld this summer as an appeals court refused to overturn Budvar's trademark.

Anheuser-Busch briefly tried to market Budvar's Budweiser in the U.S. as Czechvar in the mid-2000s to curry favor with the Czech brewer, but to no avail. The European Union took this line of thinking a step further in 2009, when it rejected A-B's application for a Europe-wide trademark on Budweiser. Today, the trademark dispute is the subject of 61 lawsuits in 11 countries.

The stakes are high on both sides. While Budvar's hold on Budweiser in beer-swilling European markets is somewhat disconcerting to A-B InBev, the big brewer can work around it with its huge portfolio of other brands including Stella Artois and Becks. That's a bit tougher in growing beer markets like Japan, Korea and China, where Budvar owns rights to A-B's best-known brand. A-B wants to unleash Budweiser everywhere, but that's a tough proposition when you can't even control what's on the label.

Budvar, meanwhile, has reason to fear what may happen if its native Bohemia loses exclusive rights to Budweiser. Fellow big Czech brewer Staropramen fell into InBev's hands in 2000, was sold to a private equity firm in 2009 and was just picked up by MolsonCoors (TAP) in April. With Budvar's international growth already stifled thanks to its Bud battle with A-B InBev, its Budweiser exclusivity may be the only thing preventing it from becoming just the latest small brewery snatched up by the big brewing conglomerates.

The Brits have a point, however. If you're a beer drinker in St. Louis used to light, refreshing, canned fare, you'd never reach for the darker, more complex Budvar or Czechvar. Meanwhile, beer pilgrims in Prague would be loathe to pick a yellow, fizzy American Bud over a big glass of the browner brew sitting before them at a beer hall. Unfortunately, brewmasters and beer companies seldom see it the same way, which is why drinkers will still want to check your passport stamp before ordering a Bud when far from home.

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