Budweiser sues for peace in World Cup beer battle

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The maker of Budweiser has had to soften its stance on allowing rival products into World Cup events, to avoid turning its sponsorship of the tournament into a public relations disaster.

Because although Bud is America's most popular beer, and is once again extending its lead, it is just too weak for German tastes.

Local beer drinkers were in uproar over Bud's exclusive deal to supply football grounds and related events during the month-long tournament that starts in June.

So now Anheuser-Busch, the parent company, will allow one of the country's most popular beers, Bitburger, to be sold in unmarked glasses - in return for a deal to use the Bud name in Germany for the first time.

Bitburger is known as Bit, a name ruled too close to Bud, so Budweiser has previously had to be marketed in Germany under the unwieldy moniker Anheuser Busch Bud.

Anheuser-Busch paid about $80m (£45m) for the rights to be the exclusive alcohol vendor to the 2002 and 2006 tournaments, giving worldwide television exposure to the Bud brand as it tries to extend sales beyond the US. The deal was struck in 1998, before Germany was chosen as host country for 2006.

The World Cup appears likely to receive more attention in the US than ever before because the country is fielding a stronger team than usual.

Anheuser-Busch said yesterday that it expected its sponsorship of the World Cup to help Bud return to significant growth after a year in the doldrums. The company slashed prices last year in a vicious price war with the Miller brands owned by the London-listed SABMiller. That price war ended last October but appears to have tempted back drinkers, and quarterly results yesterday outstripped Wall Street expectations. US beer volumes were up 4.6 per cent, and international volumes were up 9.4 per cent.

Group sales rose 5.4 per cent, and profits stayed flat at $499m, helping send Anheuser-Busch shares more than 3 per cent higher in early trading.