In this week’s Business News: a big win for Budweiser - the Czech one, that is; the new labour minister wants to toughen up on non-EU workers; the state forestry company sees big profits for the first half of 2010; ČEZ finally wants done with its Chvaletice power plant; and the antimonopoly office owes interest to Shell for imposing illegitimate fines.
The European Union’s top court ruled on Thursday that US brewer Anheuser-Busch may not register the name “Budweiser” as a European Union-wide trademark, ending a 14-year legal battle with Czech producer Budějovický Budvar to reserve exclusive rights to the brand in Europe. Anheuser-Busch applied to register Budweiser (which refers to the German name of the Czech town České Budějovice) for an EU trademark in 1996, but the Czech brewer sought to block the application given that it used the name in neighbouring Austria and Germany. The Anheuser-Busch application was later rejected by the EU office covering internal markets, a decision upheld in 2009 by the European General Court. While Thursday’s decision means that Anheuser-Busch cannot get a blanket trademark for the 27-member union as a whole, the firm can have trademarks in individual EU markets.
Photo: archive of CRo 7 - Radio Prague
The new labour minister Jaromír Drábek says he wants stricter conditions for the employment of foreigners from non-EU countries. Firstly, the minister recommends that labour offices extend work permits only to foreigners whose positions cannot easily be filled by citizens of the Czech Republic, the EU or Switzerland. Secondly, Mr Drábek said he would be working with the Ministry of Industry to make a very serious review of the way in which private trade licences are granted to non-EU citizens. According to a governmental report from last year, “third country” citizens often use trade licences as a means of extending their stay in the Czech Republic upon loss of employment. According to the Ministry of Industry, there were 87,000 self-employed non-EU citizens in 2009, roughly three fourths of which were Vietnamese and Ukrainians.
Photo: archive of Radio Prague
The state-owned forestry company Lesy ČR managed an outstanding 1.8 billion in gross profits in the first half of this year, compared with a paltry 56 million in the same period last year. According to the company, the earnings were the result of savings and also a rise in the price of timber. General director Svatopluk Sýkora said that the company would try to hang on to the trend, even in the face of extra expenses of more than 500 million for eliminating flood and other damages. The final results for 2010 are expected to be in excess of 800 million – a significant increase from recent years. Lesy ČR owns roughly half of the forests in the Czech Republic. They are currently preparing a multi-billion crown tender for the sale of timber and forestry work for the year 2011 onwards.
Photo: archive of Radio Prague
The eurozone mortgages market grew in June at its fastest pace in two years, enough perhaps to mean an overall recovery for the bank loans market, some analysts say. According to statistics from the European Central Bank, the volume of loans for real estate purchases was up 3.4% year-on-year, the highest rate since 2008 when the current financial crisis began. For the time being however, a resuscitation of the business loans market remains but a hope, amid a year-on-year fall of roughly 2%.
Chvaletice power plant
The power company ČEZ will either be selling or trading the Chvaletice coal power plant. The station is one of the company’s most expensive, and ČEZ has been intensively seeking ways to contain its growing fuel and CO2 emissions costs since the early 1990s. The energy giant says that it has to beef itself up in the area of non-emmissions sources, and is therefore orienting itself towards nuclear and gas resources. According to the daily Lidové noviny, the Chvaletice power plant could be part of the next round of asset trading between the major energy players on the Czech market, amongst whom which EPH and the Czech Coal group may have an interest.
Royal Dutch Shell
The Czech antimonopoly office has definitively lost a dispute with the multinational petroleum company Shell for having illegitimately fined the company in 2004. According to a ruling of the Supreme Administrative Court, the office must pay Shell more than 10 million crowns in interest on a 65-million crown fine that it failed to return for several years after it was overruled. The decision will likely open the way for nearly a dozen other companies that have been illegitimately fined by the office and have received reimbursement but not interest. Companies including Telefónica, Mitsubishi, Hitachi and Lukoil are all seeking similar payments of interest which some expect could cost the state upwards of 200 million crowns.
The debts of Czech households owed to banks and financial institutions rose by 6.55 billion to over one trillion crowns in June, meaning a year-on-year increase of 78 billion, the Czech National Bank reported on Friday. Meanwhile, company bank debts for the same period decreased by 71.2 to 904 billion. The volume of households' one-day deposits rose by roughly 5 billion for the month. The growth of the M2 money supply also accelerated to 5.2 percent in June from 4.1 percent in May. The central bank makes public the statistics as part of its monthly monetary survey, based on balances from monetary financial institutions which include the central bank, commercial banks, money-market funds and credit unions.