Bass checks out Prague's lagers with a stake of 9m pounds

BASS has moved into the home of lager, buying a one-third stake in Prague Breweries, the second-largest in the Czech Republic, for pounds 9m.

Lager started flowing out of Bohemia in 1842 but its distinctive beers were denied to the West once Czechoslovakia came under Communist control in 1948.

Prague Breweries produced nearly 317 million pints of beer in 1992 from three breweries in the Czech capital. It has 10 per cent of the national market, mainly accounted for by Staropramen, a premium lager. Other brands include Pragovar, Branik and Mestan.

The Czech beer market is highly fragmented, with most of the 70 breweries having only regional distribution set-ups. Despite these contraints, the Czech beer market is the 15th-biggest in the world and the fifth-largest in Europe.

Bass, which is also underwriting a pounds 2m rights issue for the Czech company, will have sole UK distribution rights for all of its beers.

Prague Breweries was disentangled from the state in 1992 under a 'voucher system', involving the sale to Czech citizens of investment vouchers that could be exchanged for shares in certain privatised companies.

After the deal with Bass, the company will have no debts and net assets of pounds 30m. It intends to invest pounds 50m over the next five years.