Budweiser Or Pilsner?

Czech Republic | February 09, 2014
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Excel Sheet

Today, we present a story of two different breweries. Two of the most famous ones - Budějovický Budvar (Budweiser Budvar Brewery) and Plzeňský Prazdroj (Pilsner Urquell Brewery), the parents of Budweis and Pils beer.

There has been a lot of discussion in the past about what to do with the national treasure i.e. having the best trucks in the world (Tatra), having the best jet trainer aircrafts (Aero L-159) and so on.

Well, as far the national treasure is concerned, there is often a disparity between the emotional value of the asset and the real value someone is willing to pay for it. The problem with Tatra and Aero (and number of other "great" Czech products) was that not enough of customers (or no-one in the case of Aero) wanted to buy them.

There is no point discussing the details here, we would very much get to the beginning of 1990's and the collapse of Soviet Empire to be fair, but the state involvement/ownership, or the way of privatisation (the Czech way, I mean), was very often a common denominator of the problems the companies got into...

So, what to do with the remaining national treasure? Sell it, I say. Sell it while they still have a value. Actually, we are talking about a few state-owned companies here, not the Prague castle or the National Theatre, to be clear...

However emotional discussion this might be, there is too much statistics proving that Czech managers nominated by Czech politicians in the state-owned companies have been doing a bad job (or job they were told to do when being "nominated").

Surely, there are exceptions where the foreign management failed too, or there are successful state-owned companies (usually the former monopolies with a state protection, such as ČEZ or Sazka), but the mesage is clear, I believe...

Budějovický Budvar is not a bad company. It's profitable, without debts and with a great product. When looking at the numbers (or it's NO advertising campaign), however, it looks like a company without a strategy defending the very past...

SELL IT when you can…

P.S.: I forgot to mention that Pilsner Urquell has been sold to SABMiller while Budvar Brewery is still state-owned.