Costly overcapacities – Radeberger Group closes Frankfurt brewery

Germany | It is well known that German brewers sit on too much capacity. But it still came as a shock when Radeberger announced, on 29 September, that it will shutter its Binding brewery in Frankfurt. Over the next twelve months production will be relocated to other breweries and 150 people will lose their jobs.

Germany’s major brewery group said the decision was painful. But the brewery with a capacity of some 2 million hl had been operating far below capacity for years.

Production of brands like Binding, Henninger, Clausthaler (non-alcoholic) and Schöfferhofer wheat beer will most likely be shifted to the Tucher brewery in Nuremberg/Fürth, some 220 km to the east of Frankfurt. Radeberger Group is Germany’s largest, with an output of 10.2 million hl beer in 2021, according to the Barth Report, and 13 remaining brewery sites.

Binding’s disappearing act

The Binding brewery, together with the neighbouring Henninger brewery, long used to be among Frankfurt’s landmarks. Moreover, Binding was the flagship brewery in Dr Oetker’s beer investment. Germany’s privately-owned conglomerate Oetker bought Binding in 1953. Between 1967 and 2001, Binding took over and immediately shuttered more than two dozen breweries in Germany, culminating in the takeover of its direct neighbour Henninger in 2002. The brewery with a capacity of perhaps 2 million hl was demolished and the real estate turned into residential properties.

In the following year, the group was renamed Radeberger Group, after the new flagship brand, indicating Binding’s gradual drop in sales.

German beer consumption has been declining for three decades. Since the beginning of this century, German brewers have lost 25 million hl in volume sales. The pandemic alone, over the past two years, led to losses of 7 million hl in beer sales.