Germany's largest private brewery group is closing its production and bottling plant in Frankfurt due to unused capacity and drastically increased costs.
"The Radeberger Group will cease production and bottling at its Frankfurt location, i.e. the Binding Brewery, by October 2023 at the latest and will gradually relocate the brands and quantities produced and bottled there to sister locations," the Group said in a press release today.
Binding and its parent company Radeberger Gruppe belong to the private Oetker group, which was split into two parts two years ago, owned by different descendants of patriarch Rudolf-August Oetker, who died in 2007. (inside.beer, 22.7.2021)
"For a long time we struggled to keep the Binding brewery in Frankfurt as a location that was emotionally special for all of us: So we sounded out all alternative approaches and routes, used leeway and thus accepted economic disadvantages over the years with the aim of eliminating these serious not having to make a decision. Against the background of the most recent crises, the massive burdens that German brewers are confronted with and, last but not least, the dramatic cost explosions that we as an industry have to shoulder, this is unfortunately no longer possible for the group," says Guido Mockel, spokesman for the management of the Radeberger Group, the background.
The German beer market has been in decline for many years. Since the beginning of this millennium, it has lost almost 25 million hectoliters of sales, while the industry has only made marginal capacity adjustments. “As a result of the corona pandemic alone, our brewing industry lost almost seven million hectoliters of beer sales in just two years: a quantity that would probably not have been lost for the next seven to ten years had the market developed normally. This is a real sales trauma for the brewers,” explains Mockel. As a result, the German brewing industry is now suffering more than ever from unhealthy overcapacities, which are increasingly standing in the way of sustainable management.
“Brewing and bottling capacities that are not optimally utilized primarily produce one thing: avoidable costs," says Guido Mockel, describing the difficult situation for German breweries. "What applies to the industry also applies to us as the market leader: Over the years, market changes, shifts in demand or simply historically grown oversizing of the brewing and bottling plants have resulted in significant overcapacities in our group of companies, which we have accumulated in the light of crises and economic challenges can no longer be left untouched in order to be able to act and shape the market vigorously in the future," says Mockel. "That's what we're going to do. But this also requires consistency now.”
The closure follows a pattern already used in 2019, when Radeberger announced to shut down its so-called House of Cologne Brewing Tradition in Cologne with brands like Sion, Gilden, Peters, Küppers, Sester, Kurfürsten and Dom.
At that time, Radeberger decided to transfer production to another private brewery in Cologne and not to its own close-by brewery in Dortmund because of the peculiarities of the Cologne beer market. Since 1997, Kölsch the main beer type consumed in the area has a protected geographical indication (PGI) and may not be brewed outside 50 km/30 miles of the city of Cologne. (inside.beer, 12.4.2019)
The idea of closing the brewery in Frankfurt and using the valuable site in Frankfurt's posh Sachsenhausen district for residential and office development had existed before. A good 15 years ago, consideration was given to moving the brewery to Bad Vilbel, around 13 km away. However, the already well-developed plans were quickly buried again in the wake of the financial crisis.
According to information from Inside Getraenke, the Binding (100,000 hl) and Henninger (15,000 hl) brands, which are currently produced in Frankfurt and have deep regional roots, are to be brewed at the sister brewery Tucher in Nuremberg/Fürth in the future. Market experts fear that the two traditional Frankfurt brands, which used to be several million hectoliters in size in the 1980s, will not survive for long the relocation more than 200km away from its origin.
The Schöfferhofer and Clausthaler brands, which are also produced in Frankfurt but that are not so tied to one location, are to be distributed to other locations within the group.
Around 150 employees are affected by the closure. "Wherever possible, the Radeberger Group is looking for socially acceptable solutions in the talks that are now beginning with the employee representatives. These can be, for example, offers for partial retirement or alternative job offers at other locations,” the press statement reads.
The headquarters of the Radeberger Group and it’s around 380 employees in Frankfurt are expressly not affected by this measure. The 13 breweries and more than 80 brands throughout Germany and the mineral fountain in Löhnberg will continue to be managed from Frankfurt. Radeberger group continues to be “the largest draft beer marketer in Germany and powerfully shapes its industry as a leading logistics company for beverages and operator of specialty beverage stores,” the statement ends.