Anheuser-Busch InBev NV said it will stop selling its flagship beer in Italy under the Budweiser brand name—calling it Bud instead—following an unfavorable ruling from the Italian Supreme Court.
"While the decision does not include an order prohibiting our use of Budweiser in Italy, we will transition to the Bud brand [there] to make sure that there is no disruption in the supply," said Karen Couck, an AB InBev spokeswoman. AB InBev, the world's largest brewing group, will continue to fight for the rights to the Budweiser trademark in Italy, she added.
The row centers on who has rights to use the name Budweiser—AB InBev or Czech brewer Budejovicky Budvar NP. The two brewers have been fighting over the brand name for years. Both claim rights to the brand and its iterations in various jurisdictions around the globe.
In Italy, a lower court had previously determined that the Budweiser brand in the modern day has no connection with the Czech town of Budejovice, or Budweis in German, and therefore was no obstacle to AB InBev's use of the name. But that ruling has now been overturned. Italy's Supreme Court—which rules primarily on procedure—found in September that the lower court's ruling was erroneous.
A lower court of appeals in Italy will now have the chance to rehear the case, but must do so according to the parameters set out by the highest court.Bloomberg AB InBev and Czech brewer Budejovicky Budvar have been fighting for years over the Budweiser brand.
Petr Samec, spokesman for Budejovicky Budvar, said any further rulings in Italian courts should merely rubber stamp the high court's decision and he said Budvar aims to launch its sales of Budweiser beer in the southern European Union state before the end of this year.
AB InBev has more than 50 trademark disputes in more than 20 countries with Budejovicky Budvar. In some big European markets, including France, Russia and the Ukraine, AB InBev already uses the name Bud, not Budweiser, on the beer label. AB InBev recently stopped selling the beer in Germany, where it was marketed under the name Anheuser Busch Bud, and it doesn't sell Budweiser in Czech Republic.
The disputes have complicated AB InBev's efforts to turn Budweiser into a global brand. The beer is growing in overseas markets but boasts a world-wide market share of only about 2% in an industry still dominated by local brands. U.S. consumption of Budweiser has fallen 24 straight years, dropping the former "King of Beers'' to No. 3 in sales behind Bud Light and Coors Light.
Sanjeet Aujla, equity analyst at Credit Suisse Group AG, said the ruling and subsequent brand switch should have little impact on AB InBev, as sales in Western Europe account for not more than 5% of the group's pretax earnings.
AB InBev declined to provide country-specific information on sales and revenue.
During the Austro-Hungarian Empire, when German was the lingua franca of central Europe, Budweis was the name of a city in Bohemia famous for its beer. Adolphus Busch, the German-born founder of Anheuser-Busch, named his U.S.-made beer after the Bohemian city.
But following the First World War, Czech was restored as the official language in Czech lands and the name of the city was restored to its Czech version.
Write to Sean Carney at email@example.com
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