China/Germany: Plans for new USD 2 billion German beer town signed

The Chinese city of Neijiang in the southeast of Sichuan province will be home of a German-style beer town according to news by Xinhua, the official state-run press agency of the People's Republic of China. The district government last week signed an agreement for the 13 billion yuan (about USD 2 billion) project with Kalenburg and Heimat. The two companies are said to be affiliated with Heidelberger Brauerei, the oldest and largest brewery in Heidelberg. Heidelberg is a German city which is known for its Baroque old buildings, its romantic castle and Germany's oldest and one of Europe's most reputable universities.

The Chinese beer town will be built on an area of about 170 hectares and will include a 3 million hl brewery for Heidelberger beer, as well as a beer museum, a square featuring beer, a shopping center and a hotel. The architecture will resemble landmark buildings in the German city of Heidelberg, such as the Student Prison of Heidelberg University and the Church of the Holy Spirit.

The original Heidelberger Brauerei was founded in 1753 in the historical center of Heidelberg, Germany. In 1999 the brewery was relocated to its current location in Pfaffengrund on the outskirts of the city. In 2005 the brewery was acquired in a management buyout by the then managing director Michael Mack who started his career nearly years ago in the Heidelberger Schloßquellbrauerei, as it was called at that time.

The small brewery sells about 37.000 hl of beers thereof about 70 percent to bars and restaurants and on festivals in a close circle around the brewery. Especially in times of the COVID-19 pandemic, when bars and restaurants are closed, small breweries are struggling for a living not only in Germany. A deal in distant China will therefore come about as ordered.

So far, export has only been a tiny part of the total sales volume of Heidelberger. The new deal will give the brewery the chance not only to earn some extra money but also to boost the reputation of the brewery far beyond its current borders.

From next year one of the two Heidelberg master brewers will travel to China to help the new partners, who are completely new to the beer business, to brew the beer according to the old recipes.

German beer is very popular in China and Chinese companies are looking to buy or license German beer brands for export to China or license production within the country.

Already for many years, Prince Luitpold of the House of Wittelsbach, who is the great-grandson of the last King of Bavaria, has licensed the trademarks for his "beer of royal highness" Kaltenberg and König Ludwig to two breweries close to Beijing (TBT Urbräu) and Shanghai.

In March 2019, Dashang Group the largest retailer in Northeast China, bought the more than 400-year old Schlossbrauerei Au-Hallertau through its German subsidiary FCAA Castle Brewery Company.

Only a few months later, 1308 Brewing Technology Co, signed an agreement with Princess Katalin von Wrede, managing director and co-owner of Fürst CarlSchlossbrauerei Ellingen (Prince Carl Royal Brewery Ellingen) for a license production of Fürst Carl (Prince Carl) beer in China. The beer is being brewed at Liaoning Tianhu Brewery in a city not far from Shenyang in the North East of China. (, 14.2.2020)

However, people close to the matter explain that the Chinese partners of Heidelberger Brauerei are most likely more interested in the real estate part of the business than in the brewery itself. The brewery is only a minor part of the whole investment and is needed to convince officials to approve the whole project. While most of the money will be earned by selling and renting apartments, shops and houses, the brewery will most likely have difficulties in working at full capacity.

Copycat cities have already been realized in other parts of China and the housing developments are destined for the wealthier Chinese population.

Most prominent is a housing development in Luoyang in Guangdong province, two hours drive north of Hong Kong, which was modelled after the small town of Hallstatt in Austria, rated as World Heritage. The center of the area contains a replica of the parish church, the fountain and various other objects from the original Hallstatt town centre. The housing project was built by the China Minmetals Ltd., a wholly owned Hong Kong-listed subsidiary of China's largest steel and mining company, China Minmetals Corp.

Other replicated cities in China include Manhattan in Tianjin (Yujiapu Financial District), Jackson Hole, Wyoming, in Hebei Province and Venice, Italy, in Dalian, Liaoning Province.

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