Maybe this globalized government thing isn't so bad for American business after all. This just in from Europe: Anheuser-Busch (NYSE:BUD) can continue using the name "Budweiser," even on that most anti-business (or at least, anti-American business) of continents.
It's been more than five years now since the U.S. government filed a complaint with the World Trade Organization on Anheuser-Busch's behalf. The issue in question was an objection by Czech brewer Budejovicky Budvar to Anheuser-Busch's continuing to use its trademarked name "Budweiser" on beer sold on the continent -- a trademarked name, incidentally, that Anheuser-Busch has been using since 1876 (whereas the Budejovicky Budvar brewery opened for business nearly 20 years later).
Budejovicky Budvar based its objections on the EU's rules for naming products according to its "geographic indications." These rules were initially put in place to prevent, for example, American sparkling wine manufacturers from calling their products "champagne" and accidentally deluding the poor village idiots of Paris into thinking the drink was actually fermented and bottled in Champagne, France. I guess that's understandable insofar as it goes. But Budejovicky Budvar went one step too far (in the WTO's view) by arguing that translations of registered geographic indications were also protected under EU law. "Budweiser" is arguably a German translation of the Czech "Budejovicky." Hence, Budejovicky Budvar argued that Anheuser-Busch was violating EU law by trying to peddle its "counterfeit" brew the length and breadth of Europe.
Now, there are two things about the WTO decision that investors need to focus on. First, it is broader than the Anheuser-Busch/Budejovicky Budvar dispute. The WTO said the EU should change its rules to permit the use of one trademarked name by one producer when that name, under another translation, has been registered as a geographic indication, so long as consumers will not be confused by the simultaneous use of both names by different producers. It also said the EU should permit non-European companies to register their own products' geographic indications in the EU. So, for example, American producers could register Florida oranges, Idaho potatoes, and Wisconsin cheddar in the EU.
Second, there are U.S. companies other than Anheuser-Busch that might benefit from the WTO decision. American food producers such as Dean Foods (NYSE:DF), Hidden Gems recommendation Fresh Del Monte (NYSE:FDP), and Del Monte Foods (NYSE:DLM) could all conceivably avail themselves of the new rules at some point, by registering their various products under geographic indications -- when, or if, the EU complies with the WTO's ruling.
Study up on the EU's web of anti-competitive regulations in:
- Microsoft, EU Continue Squabble
- Europe's New War With America
- Stripped Windows
- EU Is a Banana Republic
Fool contributor Rich Smith owns no shares in any company mentioned in this article.
