Beer Monopoly



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On our own behalf – The Beer Monopoly on the Forbes List „Best Booze Books of 2017“

We are speechless. Surprised. Humbled. Incredibly grateful. Our book The Beer Monopoly appears on this year`s Forbes List "Best Booze Books". No, no, it`s not the Forbes Rich List. Fat chance of us ever getting on to that one. The list was compiled by Tara Nurin and can be found here >>

Posted September 2018

Germany – “Cultural appropriation”: Is it ok for visitors to wear a dirndl at the Octoberfest?

In the run-up to this year’s Oktoberfest, which opens on 22 September 2018, the UK’s newspaper The Guardian reported that visitors wearing sexy Alpine outfits at the Munich beer festival have been accused of tasteless cultural appropriation.

Here is the link: https://www.theguardian.com/world/2018/sep/10/oktoberfest-dirndl-is-it-ever-ok-to-wear-sexy-versions-of-traditional-dress

In case you have never come across the term – cultural appropriation is the killer argument used by the political correctness police, a self-appointed grassroots movement which calls for censorship from the bottom up.

In the name of oppressed minorities, it seeks to prohibit someone from a dominant culture from adopting certain elements of a smaller or indigenous culture. These can include ideas, practices or symbols. It is basically another way of calling someone a racist.

In the past cultural appropriation was a popular hit-and-kill accusation in the arts world. Thereupon shows were cancelled, artworks removed and careers destroyed. But it has since also been widely used by the commentariat in popular culture, like when non-Japanese US celebs wore kimonos. This was enough to become the target of a vicious shitstorm.

Even the TV chef Jamie Oliver recently found himself in hot water because he had the temerity to launch a product called “punchy jerk rice”. In the eyes of his critics Mr Oliver had used the word “jerk” only to drum up sales. Worse still, he had not stayed true to the authentic Caribbean recipe which is usually a marinade for meat.

Good grief. And now it is dirndls and lederhosen which seemingly need protection from cultural appropriation.

Before readers headed for the Oktoberfest lose any sleep over the issue let me say that it is quite ok to wear dirndls or lederhosen. I can say this with certainty because having been born in Munich I am allowed to self-identify as a member of that minority culture called “Bavarian”. Readers, you have my blessing.

Let me also point out that dirndl and lederhosen are actually the dress code for the Oktoberfest. You will be courting criticism if you turn up in clothes other than a dirndl or lederhosen.

This was not always the case. Until 1990 or so visitors to the Oktoberfest wore whatever they liked, says the photographer Volker Derlath. He should know because his photo series of the Oktoberfest (since 1985) must count as one of the longest-running and most astute aesthetic reflexions on the Oktoberfest’s transformation from a local beer festival to a fetish party for all. Replace latex and leather by dirndl and lederhosen, Mr Derlath says, and you get the idea.

Readers may not like to share his view, but there is equally no denying that thanks to the city’s relentless marketing efforts the Oktoberfest has become Brand Munich’s USP, attracting about 6 million people from all over the planet each year. In a fortnight they consume about 60,000 hl beer.

For Munich’s fashion retailers this means selling as many dirndls and lederhosen as they can. Of course, you can spend any amount of money on those garments. The biggest sellers however seem to be the “instant” variety. Dirndls retail for as little as USD 35 and lederhosen kits (including shirt and braces) for under USD 60. They are worn until they literally burst at the seams.

The Guardian piece is obviously meant to be taken with a pinch of salt. True, some locals and tourists may be appalled by the many sexy dirndls they see at the Oktoberfest. But The Guardian is wrong in calling the original dirndls “modest”. Throughout history dirndls have always been cut such that they draw attention to certain parts of the feminine physiology. The same applies to lederhosen and men’s calves, by the way.

My Oxford tutor once said that if women and men cannot look good in “full sub fusc” (Oxford’s academic dress including gown) there is really no hope for them. The same holds true for dirndl and lederhosen. Go and put them on when visiting the Oktoberfest and don’t worry about cultural appropriation.

USA – Meet the President: Jim Koch triggers scandal for the social media age

Jim Koch, the founder of Boston Beer, picked a side in America’s political wars when he accepted an invitation by President Trump to an elite gathering of a dozen or so industry bigwigs on 7 August 2018. The reason we know is because on the following day various media outfits posted a video of Mr Koch’s impromptu dinner speech on Facebook.

What did Mr Koch say? All he said was that President Trump’s tax reform was “a very big deal” for American brewers, who were not operating on a “level playing field” with foreign-owned breweries.Read on

South Africa – Craft brewers establish industry body

It was a timely move. Faced with a weakening economy, a heavy tax load and powerful rivals like AB-InBev and Heineken, South Africa’s craft brewers have finally come together and established an industry body called Craft Brewers Association South Africa (CBASA). It is led by a committee of industry stalwarts Brian Stewart, Wolfgang Koedl, Troye May, Nick Smith, and Apiwe Nxusani Mawela.

Since the beginning of this year, they have been working together with the 200-strong community of local craft brewers to set up a united brewers association with the aim of forging a strong, growing and world class South African craft beer culture.
Read on

Australia – Kirin may sell Lion’s dairy and beverages unit

Japan’s beer and beverage maker Kirin Holdings recently announced a strategic review of its Australian Lion-Dairy and Drinks unit, looking at a possible sale among its options. The unit, whose brands include PURA milk and Big M flavoured milk, is part of Kirin’s Australian subsidiary Lion, which is also the country’s number two brewer. Kirin bought the business a decade ago for about USD 2.6 billion.Read on

United Kingdom – BrewDog to become the Netflix of food and drinks?

In terms of marketing the Scottish punk brewer BrewDog is bested by none. It is the only one to date who has successfully managed to turn crowdfunding into a world-wide advertising campaign. Selling a 22 percent stake to a private equity firm for about USD 120 million in 2017 may have been triggered by financial constraints but it gave BrewDog the cash to follow Red Bull’s example and set up its own media group.

A decade ago Red Bull’s Austrian co-owner Dietrich Mateschitz launched his own media group, including a publishing house and a TV channel, to report on the company’s various sports sponsoring activities. The tactic is simple: Red Bull engages in sports activities so that it can market them, thus raising the beverage’s global profile.Read on


Australia – 7-Eleven buys alcohol delivery firm Tipple

Wooing those Millennial couch potatoes. After AB-InBev bought the online alcohol retailer BoozeBud in early August 2018, the 7-Eleven Group has acquired a majority stake in the alcohol delivery start-up Tipple. The transaction was announced on 14 August 2018. No financial details were disclosed.

Founded in 2015 and offering over 500 different alcoholic beverages on its app, Tipple is best described as a virtual liquor shop that does home deliveries. Like a pizza service for booze, Tipple delivers orders cooled in 30 minutes to shoppers’ homes by partnering with local and independent bottle shops. The drivers are employed by Tipple. Read on

USA – PepsiCo buys SodaStream for USD 3.2 billion

Why now? PepsiCo is splashing out a bubbly USD 3.2 billion for the Israeli company SodaStream, a manufacturer of sparkling water kits. The transaction was announced on 20 August 2018. By our read of the numbers the outlay is about 30 times SodaStream’s profits (EBITDA).

PepsiCo and SodaStream have co-operated before. They trialled some Pepsi flavours in 2014 which did not taste nice. If PepsiCo was so keen on SodaStream, why did they not buy it at the beginning of this year, when its share price was only USD 70? Instead PepsiCo is now paying USD 144 per share, an 11 percent premium to SodaStream’s previous closing price.
Read on

USA – Constellation’s choice: craft beer or cannabis?

What was all that about? The number three US brewer Constellation Brands could invest up to USD 7 billion into Canada’s Canopy Growth, a nascent marijuana company. Is this a departure from Constellation’s playbook of buying craft brewers to increase overall revenues and sales? Canopy Growth has little revenue and no profit, but the legalisation of recreational pot in Canada as of October this year could change that. Already, Canopy’s share is very high – as if massive growth is already a sure thing. Read on

Russia – PET goes draught: take home draught beer boosts regional brewers

Prohibition breeds ingenuity. After the ban on kiosk sales of alcohol, some ingenious entrepreneurs invented a specialised retail channel which holds the middle ground between the on-premise and the off-premise. Called “Draught In Off-Trade” (DIOT) it serves beer straight from kegs into PET bottles for shoppers to take home.

The DIOT boom was made possible by a homegrown invention: the Pegas beer filler by company NPM from Novosibirsk, which fills PET (and other containers) quickly and foam-free.

These DIOT outlets are either stand-alone pavilions, or shop-in-shop formats in supermarkets. But their most popular incarnation is outlets on the ground floor of Soviet time apartment blocks, which offer anything from 25 to over 100 different draught beers. Read on

Ukraine – Illicit alcohol and the plight of brewers

Ukraine is turning into Europe’s hub for illegal vodka. With illegal alcohol production estimated at 60 percent of total, smugglers are spreading the moonshine across all of Ukraine’s neighbouring countries. Their ingenuity at upscaling operations needs to be admired. Last year authorities discovered several pipes, each a kilometre long. Once assembled they would have formed a pipeline from Ukraine into Moldova, a country to the southwest of Ukraine which borders with the EU member country of Romania.

Blame it on the government’s hike in excise – almost to the level of the EU countries – and the all-pervasive corruption that illegal alcohol production is industrial in scale. Read on

Kaliningrad – Nationalism and beer

Decades ago, the late singer Frank Zappa quipped: “You can’t be a real country unless you have a beer and an airline – it helps if you have some kind of a football team, or some nuclear weapons, but at the very least you need a beer.” Mr Zappa was a singer, not a historian or political scientist. But it could well be that he was right: What is Ireland without stout, the Czech Republic without pilsner or Australia without lager?

Beer has proven to be a powerful emblem of nationalism and cultural identity, even in places like Kaliningrad, where locals lament the lack of a national brewery.

It was a recent visit to Kaliningrad Oblast, which made me reflect on beer as one of the four pillars of nation building – pace Mr Zappa. Kaliningrad Oblast is a slither of a nation on the Baltic Sea, lodged between Lithuania in the north and Poland in the south. In terms of size it is as big or as small as Northern Ireland. Formally it is a Russian exclave. An exclave is a portion of territory of one state completely surrounded by territory of another or others. Kaliningrad does not have an overland connection to the motherland any longer. Before the collapse of the Soviet Union it was among its most western outposts, the Baltics. However, today, if you were to travel from Kaliningrad, the capital formerly known as Königsberg, to Moscow, you will first need to cross into Lithuania and from there into Latvia before you reach Russia.

A note on terminology. I will use “Kaliningrad” when referring to the exclave and Königsberg when referring to the city that is known as Kaliningrad today. This does not make me a diehard or, worse still, a reactionary. Just a writer trying to avoid misunderstandings.

Kaliningrad’s history is inseparably entwined with that of East Prussia. Until the end of World War II, Kaliningrad was part of German East Prussia and populated by mostly German speakers. East Prussia used to be three times larger than Kaliningrad but its northern part – Memelland – fell to Lithuania in 1918, while the southern part was added to Poland after World War II. Throughout its history, East Prussia was a multi-national country, populated by Germans, Lithuanians, Poles, Ukrainians and Jews. In the course of a few years its original population was either exterminated (the Jews) or fled (Germans) or was removed by force (those that remained).

Language fails to express the atrocities committed or endured by the various nations. The outcome of the war and the Holocaust is such that there is no continuity between the inhabitants of East Prussia and Kaliningrad. Königsberg was a burnt-out shell and the hinterland nearly devoid of life. Not tardy, the Soviets renamed Königsberg Kaliningrad after the Bolshevik Mikhail Kalinin (he who set up the gulags) and assigned a few soldiers to the task of finding Russian names for 2,500 former German villages. In no time all traces of East Prussia’s peoples and history had been eradicated, including most of its breweries. It was on to a tabula rasa, a clean slate, that Russians from further east were settled

Many of these settlers were themselves victims of the Soviets’ large-scale relocation policies. Purposefully uprooting peoples and severing them from their histories and traditions the communists sought to create Homo Sovieticus, the New Man, whose ignorance of the past was to prove his strength (in George Orwell’s ironic “1984” formula “ignorance is strength”).

In Königsberg I met a woman, an ethnic Russian, whose family in the course of only two generations had traversed the vast country twice. Her parents had been deported to Vladivostok, a city on the Pacific Ocean, where she was born. Did she know where her parents had come from originally? She shrugged her shoulders. Did she know who lived in her house before? Again, a shrug. There were no neighbours to ask. It was only a building that was left standing after the Allied bombing raids in August 1944.

If I call the 950,000 inhabitants of the exclave a nation, it is because nations are above all “imagined communities”, a concept coined by the Marxist historian Benedict Anderson. Not to be confused with nation states, which only arose in the 18th century, nations are socially constructed communities, imagined and desired by the people who perceive themselves as part of that. Seen in this light, Mr Anderson views nationalism as a positive force and not the natural enemy of tolerance, multiculturalism, and internationalism. Mr Anderson’s other observation, which has informed this piece, is that nations always loom out of an immemorial past, and, still more important, glide into a limitless future.

This holds true for exclave too. Just because many of its inhabitants have been deprived of their own personal histories and identities and put into a place whose history and identity have nearly been wiped out, this does not mean that they do not seek identification. The tentative stirrings of a “Kaliningrad nationalism” – that is what it is – may be fantastic because there are no museums in the exclave commemorating East Prussia. Therefore, it can only be based on a hotchpotch collection of assumptions. But it is still deep and heartfelt. Real, in other words. And it spurs people on.

If Russia’s long history, in Russians’ popular imagination, is heroic, East Prussia’s is above all gallant. Königsberg was famous as a centre of learning. Its university was founded in the 16th century. It was the intellectual hotbed of 18th century German Enlightenment and known for its republican-liberal bent in politics. Being such a polyglot and wealthy city, the philosopher Immanuel Kant never felt the desire to leave. Instead he established a daily routine of writing, walking and entertaining, which he followed to the minute, and lived to the ripe old age of 80. Funnily, Kant only drank wine because he hated beer which he blamed for all kinds of illnesses. This did not impact beer’s popularity in his home city. In the 18th century there were over 200 breweries in Königsberg, even though their number would dwindle to 30 by 1850.

Still, it takes a stretch of imagination to match contemporary Kaliningrad with East Prussia’s grandeur. Königsberg may look far superior to other post-Soviet cities I have visited, but plenty of towns and villages are in such a state of dilapidation and despair that the locals’ collective imagination can only run to the next bottle of vodka.

Nevertheless, as Königsberg’s reconstruction of its pre-war splendour proceeded after the fall of the Soviet Union, culminating in the restoration of its Gothic cathedral in 1998 with the help of German money, locals must have felt increasingly torn between their Russian identity and their longings. Those who decided to stay needed a mental framework for who they really were. What is more, being physically cut-off from Russia probably also made them turn their heads westwards in search of cultural links and much else. The historical axis Königsberg-Berlin used to be much stronger and physically shorter (only 650 km) than the one between Königsberg and Moscow (1,200 km).

In my view, it was far easier to fashion a new imagined community in Kaliningrad than in the newly independent Baltic countries, where Estonian, Latvian and Lithuanian nationalisms came to the fore with a vengeance and ethnic Russians suddenly found themselves as second-class citizens. Moreover, by the 1990s Kaliningrad’s original population was already reduced to historical memory. The erstwhile inhabitants had escaped to Germany, dropped their funny accent and become part of the post-war “Wirtschaftswunder” (“economic miracle”).

It may seem bizarre that the exclave’s mainly ethnic Russian population (there are also small communities of Ukrainian, Belarusian, Tatar, German, Armenian, Polish, and Lithuanian descent) is not averse to embracing a foreign heritage. Nonetheless, the desire to identify with the spirit of a place – to belong – should not be underestimated. The signs marking the shift are ever so subtle, like registration plate holders reading “Königsberg” in German rather than “Калининград” in Cyrillic. This may be due to caution. Aware of her people’s clandestine westward turn, Moscow will not take to any kind of secessionism lightly.

I was told about a recent survey which shows that only elder inhabitants predominantly self-identify as Russian. The younger the respondents, the more often they described themselves as “Königsberger” or Europeans. In an effort to quench local discontent Moscow has kept Kaliningrad on a steady flow of subsidies as well as arming it to the hilt with all kinds of weapons in case NATO attacks. The FIFA World Cup this summer gave Königsberg much needed investment in infrastructure and a new soccer stadium.

When it comes to Western consumerism, there is little Moscow can do to beat Lidl. Everybody I spoke to raved about the German retailer. To date, Lidl has refrained from venturing into Kaliningrad. Nevertheless, it set up a store in the Polish town Braniewo, about 60 km south of Königsberg, where it must do quite a bit of business with shoppers from the Oblast. Russians once enjoyed free day-visas to Poland and managed to get around the EU’s sanctions on Russia following her invasion of the Crimea in 2014. However, alarmed by Russia moving more soldiers and kit into Kaliningrad, Poland in 2016 clamped down on the visa waiver programme.

In Kaliningrad’s eclectic nationalism beer does not loom large despite East Prussia being famous for its breweries and beers. In the late 19th century, the whole of East Prussia had over 300 breweries (and quite a few distilleries too, actually). Blame it on the new settlers’ predilection for vodka that breweries fell into disrepair and literally vanished after their roofs and bricks were used to construct new buildings.

Königsberg’s major brewery, founded in 1814 and reregistered as Ostmark Brauerei in 1910, managed to survive Soviet nationalisation as “Kaliningradskij Piwsawod”. In the 1990s it was privatised again and awarded its old name Ostmark (“eastern border region” in English), a German term for East Prussia. Such was the liberal spirit under Russia’s President Yeltsin that it was allowed to brew the brand Ostmark. In 2001 it became part of the Russian brewery group PIT, which was sold to Heineken in 2005. Given Kaliningrad’s small market, the one-million hl brewery must have suffered from serious underutilisation after the Russian government launched its anti-alcohol policies about a decade ago. In 2016, Heineken decided to close it down.

Older consumers were dismayed. “Their” 200-year-old brewery had fallen victim to the corporate axe. Although Kaliningrad does no suffer from a dearth of beers – on the contrary, Carlsberg, Heineken and AB-InBev offer wide portfolios of brands – local beer production is now limited to 16 microbreweries and brewpubs, most of which were set up since 2008.

Königsberg’s most famous pub brewery is Khmel (English: hops), a multi-storey glass-and-steel venture, located in Victory Square. Inside you could be forgiven for thinking you are visiting a US brewpub. But punters just have to look outside through the windows and they will see two symbols of Russia’s lingering predominance: the Victory column, which commemorates Russia’s victory over Nazi Germany, and the newly-built Russian Orthodox Cathedral, the second-largest in the whole of Russia.

It was a brewery ruin in Polessk (formerly Labiau in German, Labguva in Lithuanian, and Labiawa in Polish), a town of perhaps 7,000 people, 60 km to the northeast of Königsberg, which highlights how passionately current-day inhabitants are looking for that connection to East Prussia’s past.

The Labiau brewery is one of those brewing castles they liked to build in the 19th century. The plant, one of the few to re-open after the war, kept up production until 1957, when it switched to making juices, lemonades and berry wines. In the 1960s the building was abandoned to its fate and the elements.

What is left is a monster of a red brick pile with gaping holes in its walls and a chimney which looks as if about to collapse. It was bought by locals, the two brothers Natalich, in 2015 for a nominal sum. In real life the two run a window replacement firm. Any profits they make, they pour into restoring the brewery.

Already they have managed to open a small visitor centre. Sadly, the brewery’s metal equipment is gone. But they have managed to research the brewery’s history which they tell in both Russian and German: how it was founded in 1840 by a local, Albert Blankenstein, as a brown beer brewery; how in 1843 it was turned into a stock company and made top-and bottom-fermented Bavarian style beers, most famously a Labiau Märzen; how in the 1870s today’s structure was erected; how in 1918 the brewery launched lemonades and in 1928 liqueurs. How did they find out about all this? Obviously, someone had researched the 1936 edition of German Brewery Address Book, which lists this sort of information. Incidentally this directory has been continued by Hans Carl Publisher, the publisher of Brauwelt, since 1948.

The brothers are keen on putting a small brewery there to brew those original Bavarian style beers. Given the little money they have, it might take them a while to bring their plans to fruition.

Eventually, the exclave will tick all of Mr Zappa’s criteria for nationhood: it already has a soccer team, nukes (maybe, maybe not), and an airport. Given the brothers’ dedication to their task, Kaliningrad may one day have a revitalised historical brewery again.

Denmark – Carlsberg raises its full-year profit guidance

Carlsberg is optimistic that in 2018 it will hike its profits (EBITDA) by a high-single-digit percentage. Previously it forecasted an increase of about 5 percent.

This optimism is based on buoyant beer sales in Asia during the first half of 2018. Carlsberg reported half year results on 16 August 2018 which showed an increase in total beer sales to 55.7 million hl, up from 54 million hl in the same period in 2017. It still sells the bulk of beer in Western Europe (22.9 million hl), followed by Asia with 17.8 million hl. Eastern Europe came in third at 15 million hl (27 percent). Read on

United Kingdom – Is Lancet alcohol study brewers’ “glyphosate moment”?

At the end of August 2018, media around the world ran headlines screaming “alcohol is bad for you” – or something to this effect. This message was based on a study published in the British medical journal The Lancet, which claims to be the definitive study on the benefits and dangers of drinking.

As is often the case, the study’s results are much less newsy and much more measured. But in years to come the study and the ensuing headlines could swing public opinion against alcohol. In fact, taken together they could turn into brewers’ “glyphosate moment”.

The controversy over glyphosate has been raging for years. Although scientific evidence is divided over whether the weedkiller causes cancer in humans or not, most people in Europe seem to believe that it does, so much so that EU officials in a narrow vote in November 2017 only gave it another five-year lease. A US court meanwhile ruled that Monsanto, the company behind the weedkiller, should pay USD 289 million in damages for causing cancer. Read on

USA – MillerCoors to cut 350 jobs

Having seen its beer sales drop for several years, the number two brewer in the US, MillerCoors, announced on 4 September 2018 that it will cut 350 jobs as part of a new restructuring plan aimed at getting its business “back on track”.

The last time MillerCoors did a corporate reorganisation was in 2013.

In addition to axing jobs, the brewer is searching for a new chief marketing officer and has appointed a new executive to oversee the conversion of its breweries to an integrated system. Read on

United Kingdom – Coke buys coffee shop chain Costa Coffee

Analysts are sceptical: Why is the Coca-Cola Company spending USD 5.1 billion on a chain of coffee shops, a business in which Coke has no experience? The company announced on 31 August 2018 it will buy Costa Coffee, a chain of British coffee shops, from hotel-operating conglomerate Whitbread to take on Starbucks. It was reported that Coke is paying a high price of 16.4 times Costa’s profits (EBITDA). Coffee was missing from Coke’s portfolio of soft drinks, juices, teas, water and sports drinks. It is not clear why buying a coffee chain is the solution. Read on

USA – BA launches “That’s independence you’re tasting” campaign

Can you taste independence in a beer? Of course, not in a literal sense. But as taste is a matter of tastebuds and mind coming together, the Brewers Association (BA) has launched a national awareness campaign for independent brewers.

The campaign aims at educating beer lovers about the craft brewing community and what it means to be independent. Called “That’s Independence You’re Tasting”, the integrated advertising campaign includes a few videos that can be watched across a variety of media platforms. Read on

Germany – AB-InBev’s sale of two breweries could collapse again

What a mess. AB-InBev’s sale of two of its German breweries and brands has fallen through for the second time as the buyer, a tiny German outfit by the name of CK Corporate Finance, again failed to meet its obligations.

The deal, which would have seen CK Corporate Finance buy the Diebels and Hasseröder breweries cum brands for an estimated EUR 200 million from AB-InBev, was signed in January 2018 and was expected to be completed by mid-year. Read on

Germany – Workers welfare organisation opens a brewery in Munich

Munich has a new brewery. And guess who is behind it? A commercial subsidiary of Germany’s Workers Welfare Organisation (AWO). It was set up, says AWO, to provide employment for people with emotional issues. Haidbräu, as it is called, was put into a building in northern Munich, where AWO already operates several workshops: a joinery and a printing works as well as a bakery.

The plant consists of a 5 hl brewhouse and fermentation tanks for a total of 30 hl. It is run by Jens Tischer, a brewmaster with a degree from Weihenstephan, who previously worked at small breweries in Norway and on Mauritius. He is currently doing further training in social pedagogy because he will work closely with AWO’s clientele. Currently, three of them are employed by the brewery, later it will be nine. Read on




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