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Should we be worried?

A bit more than a month ago AB-InBev made official the sale of Staropramen, together with a bunch of other Eastern European breweries. As I mentioned here, the buyer is CVC Partners, a Private Equity Group of Belgian origins. According to what's been reported, the transaction won't be effective until next January and the new brewing group will be named StarBev.

No surprise, nothing new, not much to talk about. However, reading past the headlines I came across two bits of information that all by themselves don't say much, but when brought together and spiced with a pinch of paranoia might give some reasons to worry.

First bit: The purchase contract has a provision that stipulates that should CVC ever decide to sell any of these breweries AB-InBev retains the right of first offer. Nothing to worry about here. After all, these breweries haven't been sold because they were a bad business, but because the brewing giant was badly needing cash to cover some debts. It's logic then that they will want to reserve the possibility of getting them back if the circumstances so allow.

Second bit: Sooner or later the Czech government is going to privatise Budvar. We can bitch all we want, the Facebook group "Keep Budvar Czech" can have hundreds of thousands of members (not even close), but nothing is going to stop the inevitable, so we'd better come to terms with it and hope for the best outcome.

In one of the reports on the sale of Staropramen, one of the honchos of CVC was quoted saying that his company was very interested in the privatisation of Budvar.

You see where this is going, right?

Perhaps the main reason why Budvar hasn't been sold yet is the legal conflict with AB about the trademark, which spans several countries. Until that is sorted out one way or another few are those who would want to pay the price asked for the brewery. But what if there is a buyer who is willing to take the risk?

If I'm not wrong, it was in 1993 that Budvar was almost sold to Anhauser-Busch, draft contracts were ready and all that. The only thing that stopped that from happening was that it was leaked to the media, outrage followed. Legally speaking, CVC has no connection with AB-InBev, so they would be a politically correct buyer.

So, let's say that CVC does buy Budvar and merges it with StarBev. After a few years they decide to sell the whole package, they are an investment fund, that's what they do, after all. The first in the line to buy it will be none other than AB-InBev. Let me remind you that one of the promises that Carlos Brito made to the shareholders of AB was that it would make the brand Budweiser (the usurper, of course) a household name in Europe. A promise that is pretty hard to fulfill considering the latest ruling of the EU Courts. All that would stop being a problem if both brands are owned by the same person.

I'm not suggesting that this an elaborated scheme by AB-InBev to finally get their filthy hands on Budvar (well, not that much). There must be safer and cheaper ways to do that. But it still gives a lot to think about.

Anyway, let's get off the speculation wagon and have a look at something more concrete. Zbyněk Kovář, Staropramen's GM said about the future of his company: "For the consumers [...] the change in ownership won't change a thing." I just hope he was being diplomatic, otherwise we are looking at a lost opportunity.

Na Zdraví!

PS: For those of you who were expecting to see the back of Stella Artois from January, don't celebrate yet. It will continue to be brewed under license in Smíchov (yeah, that's right you beer morons, Stella is not Belgian is as Czech as Braník, and about that good.)

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