Ask someone what they think of when they hear the words Prague or Czech Republic, and the chances are they will say, beer. The country is the home of the Pilsner and beer is far and away the national drink. But since the country opened up it's market in 1989, its breweries have been among the most targeted areas for foreign investment, And as Ray Furlong reports from Prague, this week has seen the culmination of a bitter struggle between two overseas companies, thirsting for control of the lucrative Czech beer market.

In the background to this week's decision by the anti-monopoly's office to block a merger between the two largest Czech brewers, were fears about the way the country's biggest traditional industry is going. The country is dotted with small breweries and each region has its own distinctive taste.

But if this merger had gone through, the driving force behind the deal, the Japanese bank, Nomura, would have commanded forty per cent of the domestic market. Some fear this could force smaller brewers out of business, since most Czech pubs only stock one beer and the scope for competition would be limited.

But the merger was largely blocked by the British brewing company, Bass, which holds the minority stake in one of the breweries concerned. Bass has been patiently building up its position in the country, introducing new brands to highly conservative Czech beer drinkers, and also bringing Czech beer to pubs in Britain. It felt the merger threatened its plans.

In world terms the dispute was a small one. Together the two breweries make just seven million hecto-litres of beer anually, which doesn't even put them among the top ten European producers.

But Bass says the victory is an important sign for foreign investors that the rights of minority share holders will be respected. And Czech beer drinkers can hope that the rich variety of brews will be preserved.