The news yesterday was that Czech regulators have given a big green light to Heineken’s takeover of the four Drinks Union breweries (Zlatopramen, Louny, Velké Březno and Kutná Hora). According to Reuters, the Czech anti-monopoly office has no problem whatsoever with the deal.

There’s a great quote at the end of the story: “The office came to the conclusion that the merger will not result into a substantial breach of competition given a relatively low market share of both competitors and the existence of significant competitors.”

In other words, “Since SABMiller already has 49% of the market, what difference does it make?”

Perhaps not much, at least for now. And some have said that Heineken helped, rather than hurt, Starobrno in its takeover there. (I noticed better logos and a redecorated brewery taproom.) But Ron Pattinson noted that Heineken is unlikely to aim for a small share of any market it enters, predicting that the Dutch would shoot for something closer to 30 or 40%.

There are only a few ways to get there from here, and all of them involve buying whole groups of Czech breweries. I know of one great small brewery in sale negotiations at the moment, but that by itself wouldn’t get Heineken even another 2% of the market.

Think K Brewery Group, with its shares in Platan, Svijany, Černá Hora and Rohozec, and which is listed in the commercial register as a real-estate agency. Or PMS Přerov, whose three breweries (Litovel, Zubr and Holba) together brew about 900,000 hectoliters annually, giving the group around 5% of the domestic market.

In any case, more takeovers are coming. If the anti-monopoly office doesn’t have a problem with them now, will they possibly take a stand against them later?

And where is our CAMRA in all this? Where oh where is our Danske Ølentusiaster?

Heineken announced yesterday that it is taking over the four great brands of the Czech Republic’s Drinks Union brewery group (Zlatopramen, Velké Březno, Louny and Kutná Hora), which have an overall market share of 4%. The takeover will make Heineken the third-largest player in the Czech market after SAB-Miller and InBev, bumping Budvar to fourth place.

It’s not exactly a surprise — news of the proposed sale was floated last autumn — but it still caused ripples across the small pond of the beer world: within a few hours I was contacted by friends at CAMRA about the purchase, and EBCU members apparently all got the message via email. Back here at home, Pivní deník reported the story, posing some interesting questions.

To paraphrase: If Heineken decides to close some of its newly acquired breweries in the name of streamlining and efficiency, who will be the first? Louny, which is closest to Krušovice, which already has plenty of unused brewing capacity? Or Kutná Hora, which Drinks Union doesn’t actually own but only rents from the town? Or one of the twinned breweries of Zlatopramen and Velké Březno? Would two breweries in the same town really survive a takeover by such a major international brewing group?

No one in the know has breathed a word. Here’s what we have so far: Heineken’s market share just jumped to around 12–14%. Newspapers have quoted Jiří Fusek, head of the association of Small and Independent Breweries, as saying that Heineken is likely to seek more acquisitions here, according to Prague Daily Monitor’s Czech press review (subscription required). Heineken already owns Krušovice, Hostan, Starobrno and Zlatý Bažant in Slovakia. They’ve been pushing their own beer in local supermarkets, which are conveniently owned by a company back in Holland.

We also know what happened to the Starobrno brewery after Heineken’s purchase there: a lot more money was invested in image, creating new logos, cleaning up the premises and renovating the on-site bars and restaurants (including a new, upper-level Heineken bar, pictured above — metaphorically suggesting that Heineken exists on a level above Czech beers, apparently in a place with lots of plants). Beyond the new paint and furniture, some believe that the taste of Starobrno has improved under Heineken’s ownership, though that’s hardly an achievement, considering that beer’s reputation before the sale.

Perhaps a more important question is this: Why does it matter? What difference does it make if foreign conglomerates purchase small Czech brewers?

One reason has to do with economics: foreign companies tend to do something called repatriation of profits, which is to say that if people here spend their money on a beer that is owned by a foreign company, the profits from that purchase are distributed and reinvested somewhere else far away. (Multiply this by enough beers and a large enough market share and you end up with the entire Czech nation sending a not-insignificant part of its income straight to Holland. I’ll take pains to point out that this is still a transitional economy — if you’ve seen the roads in the Czech lands, you know that our money is needed here.)

Another reason is that many significant decisions for these breweries are going to be made at the head offices in the conglomerate’s home country. That means that the decisions about how to brew a Czech Pilsner-style beer are going to be made by a company that thinks Heineken is a Pilsner-style beer. And Heineken doesn’t really compare.

A related reason has to do with the vitality and variety of our beer culture. Will those who have purchased Heineken’s shares on Amsterdam’s Euronext exchange really want the company to keep brewing oddball lagers like Velké Březno’s excellent Doppel-Doppel Bock? The name of the game for large brewing groups is increasing profit through larger market share and greater efficiency. Diverse product lines and redundant breweries with excess capacity are inefficient. Invariably some breweries and some unusual beers will be shuttered. The winners will be the shareholders, who will see more profits. The losers will be the consumers, who will have fewer choices.

At one of the recent tastings at Pivovarský klub, Aleš Dočkal mentioned a scenario whereby every Czech town of any size would have a brewpub — and in the entire country there will be only four or five large brewers distributing a handful of similar beers in kegs and bottles. That scene hasn’t arrived just yet. But we might have just watched the opening credits.

Here’s an interesting bit from the Czech news wires: an article at actualne.cz notes that the term “Czech beer” is moving closer to protected name status. Much like the AOCs and DOCs of the wine world, the special status will mean that brewers in the EU can only use the term “české pivo” if the beer is, in fact, brewed in the Czech Republic, as well as if it meets certain requirements of ingredients and quality.

If the application is successful, “české pivo” will join 10 other Czech geographically protected names in the EU, including “žatecký chmel” (“Saaz hops”). The big one that’s missing outside the country itself (barring “Budweiser,” of course), is “Pilsner,” used all over the world for widely different beers of varying ingredients and varying quality, even though it originally meant a certain style of beer from a certain place: a clear golden lager from the west Bohemian town of Plzeň, known as Pilsen in German. I can’t remember how many times I’ve heard people say it’s too bad the Czechs didn’t retain control over the name.

Ah, but they tried.

According to an article in the New York Times of December 25, 1910, “United States Circuit Court Judge Hough is considering an application by the Brewers’ Association of Pilsen, Bohemia, for an injunction restraining an importer from using the word ‘Pilsner’ to describe the Bohemian beer brewed outside that municipality.” The upshot: a distributor in New York was selling beer from the Bohemian town of Aussig (in Czech, Ústí nad Labem, presumably today’s Zlatopramen brewery) under the name “Pilsner.”

“The contention of the Pilsen Brewers’ Association is that no genuine Pilsner beer can be brewed outside of Pilsen,” the article continues, noting that US Treasury Department rulings on sardines (from Sardinia) and Malaga grapes gave their case legal precedents. The article, however, undermines their argument by itself referring to Pilsner beer as a style, not a specific product from a specific place. “It is contended that Pilsner has become by usage in the beer trade simply a descriptive title applying to beer brewed in a certain manner,” it says, noting that a local brewer “makes a specialty of brewing Pilsner beer in Brooklyn,” selling it as “Pilsner” in conjunction with the name of his brewery.

I mentioned this in an email to Garrett Oliver, author of The Brewmaster’s Table and brewmaster at Brooklyn Brewery, who noted that German brewers use the name “Pils” in order to avoid just this conflict. (And when “Pilsner” is used as the name of a German beer, it appears with an adjectival place name so it’s clear precisely where the beer is from, as in the case of Radeberger Pilsner, brewed in the Saxon town of Radeberg, just outside Dresden.)

It’s pretty clear how the US ruling from 1910 worked out, as many American beers — and indeed, beers all over the world — now call themselves “Pilsner.” Here, of course, I use the terms “Pilsner-style beer” or “Czech golden lager” when referring to brews that are not Pilsner Urquell. That is because in the Czech Republic, there is only one Pilsner, and everything else that is similar is pivo plzeňského typu, or “beer of the Pilsner type.”

In the big picture, this story is just a small historical footnote, but it does provide an interesting context to the story of Budvar’s fight with Anheuser-Busch today, as well as Pilsner Urquell’s decision to brew new beers with the same name in Russia and Poland.

Just imagine, for example, if Anheuser-Busch were somehow forced to rename their product “Budweiser-style beer.” Or imagine if every brewery in Germany produced a golden lager called “Bud,” alternately labeled something like “Radeberger Budweiser.”

It’s a weird image, I admit. As for “Czech beer,” it doesn’t seem like a bad idea to limit its use to beers that are in fact Czech, produced from 100% barley malt and Saaz hops. But labels can only do so much. If consumers don’t pay attention to how beers actually taste — buying, for example, low-quality brews ostensibly produced from high-quality ingredients — the term “Czech beer” could end up being a distinction without much difference. In many countries, that’s exactly what happened to “Pilsner.”