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Czech beer maker reaps export earnings

April 28, 1997

PRAGUE, Czech Republic (AP) _ Over four decades, communist Czechoslovakia won a reputation as a producer of high-quality, low-priced glass and beer.

After the transition to a market economy and the peaceful split of the country into the Czech Republic and Slovakia, the glass industry found itself no longer able to attract much-needed foreign investment.

Breweries, on the other hand, have expanded and remained a source of both income and national pride.

Plzensky Prazdroj, producer of the world-renowned Pilsner Urquell and the flagship of Czech breweries, ranks among the country’s most successful exporters, second only to the Skoda automobile maker.

But unlike Skoda, which is owned by Germany’s Volkswagen, Prazdroj in Plzen remains solely in Czech hands. Several foreign bids have been rejected, and the government has retained a ``golden share″ that entitles it to limited control over the brand name for the next eight years.

The decision to keep foreign owners out reflects the special regard Czechs have for Prazdroj, which produces five top-quality brands of beer, including Pilsner Urquell, known for a unique bitter taste and reputed healing qualities.

``Pilsner has an almost mythical appeal to us because we’re not good at many things, but we’re certainly the best at brewing beer. And Pilsner is a symbol for beer,″ said Michal Bares, a 24-year-old Charles University student quaffing a beer at the U Tygra pub in Prague.

Prazdroj’s success goes beyond the product to marketing, said the company’s managing director, Otakar Binder.

``What we had to do to grab our share on the (world) market was to improve our service and distribution. Well-organized distribution became the basis for our success,″ Binder said.

Before 1989, Prazdroj was one of just two breweries allowed by the communists to export to the West. The other was Budvar, which is now engaged in a legal battle with Anheuser-Busch over the American brewer’s rights to sell its beer under the Budweiser label.

In 1996, Prazdroj exported 11.5 million gallons of beer _ 11 percent of its $155 million in annual production _ to more than 50 countries.

Jaroslav Pomp, the company spokesman, said Prazdroj aspires to export more than 13 million gallons this year, proving it is ``one of the world beer giants.″ He said the strategy is to send more bottles to its chief buyers: Germany, Slovakia, Britain, Russia and the United States.

With a 25 percent share of the Czech market, Prazdroj also expanded to the former Soviet Union. It aims to acquire majority stakes or production units in Russian, Ukrainian and Belorusian breweries.

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