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Business

Beer Goes Over the (Chinese) Wall

It's been a century since the Germania Brewery began making beer in a former German colony of Tsingtao in China. Now the similarly named brew is firmly in Chinese hands and has set its sights on the world market.

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Chinese Tsingtao beer has German roots and is now challenging the world market

The 1903 advertisement for the "Germania Brewery" in the country's China-based colony Tsingtao promised "the best in light Pilsner beers and dark beers in the Munich tradition, made from hops and malt according to the Bavarian beer purity law."

Now, a 100 years on, the once typically German brewery is completely a Chinese operation. The beer, which has long left Bavaria's beer purity laws behind it, now has a 25 percent rice content and is the Chinese market leader. But the concern, which churns out 30 million hectoliters of Germany's national drink each year, is now looking to crack the world market.

Overseas expansion

At present the brewery only sells five percent of the beer in overseas markets. "We're still producing for the Chinese market, but we're working on developing foreign franchises," Tsingtao brewery director Yu Jiaping told Deutsche Welle. "We have a very strong customer base in Taiwan for example – we plan to build a factory there in the coming years."

Tsingtao has fought hard to create and maintain its position as China's largest beer producer, snapping up 49 of the country's breweries in past years.

"The figures are looking good," said Gerd Rodrian from Bavarian firm Krones, which provided Tsingtao’s modern bottling plant. He added that Tsingtao aims to become one of the top ten world beer producers within the next ten years. It has already harnessed the help of American company Anheuser-Busch to aid the concern's expansion onto the international beer scene. And that has Rodrian convinced of the long-term international viability of the firm.

"Anheuser-Busch would not have invested if they did not believe they would get a good return on their investment," Rodrian said.

One could argue quantity isn’t necessarily better than quality, but China is now beating Germany in the brewing volume stakes. Although half of all Germans regularly sink a pint of their national drink, it is the Chinese, not the Germans who now produce the most beer worldwide. China, which is slowly attempting to reconcile a capitalist business ethics with its communist state ideology, brewed some 240 million hectoliters in 2002.

"German beer production is just too small. Germany (as a beer producer) is not internationally competitive and financially powerful enough," Yu Jiaping told Deutsche Welle.

Hanging on to German roots

But Tsingtao, with its recognizable logo and small green bottle has managed to hang onto some its German roots. Besides the modern bottling plant Bavaria’s Krones, the historic vats, previously used to brew Tsingtao and now on show at the brewery's new beer museum, were also German-made.

And now even Germans are turning to China’s favorite brew: "It's great, really great and drinkable," said Markus Hammer, a singer with the Würzburg-based band MCF. Hammer tried the German-Chinese beer when his group traveled to China for Tsingtao’s centennial celebrations. And what sold him most on the beer? "You don't get a headache," said the musician.