Medieval Linz
Pre-industrial success
Leveraging unity
Smart decision
AUGUST 2005
The roots of Brau Union run deep; although it was not until
1921 that five Austrian breweries joined forces as the Braubank
AG, some of them had histories going back to medieval times.
Dating back to 1475, the Hofbrau Kaltenhausen in Hallein is the oldest of
the breweries that merged in 1921. It was founded by a merchant from
Salzburg called Elsenheimer, who realised that while the demand for wine
was decreasing, beer consumption was experiencing strong growth - and it
was easier and cheaper to produce. Elsenheimer used the local natural
system of mine galleries for cooling the beer.
On Elsenheimer's death, the church seized the profitable brewery from
his heirs, and oversaw an increase of beer production. Beer was served to
everyone from clergymen to the Austrian aristocracy, and by the
seventeenth century, pilgrims and the imperial army had their thirsts
slaked from the Kaltenhausen cellars. Hofbrau Kaltenhausen had various
owners up to the 1921 fusion. Today, mainly wheat beer and the Austrian
"Kaiser" brand are brewed here.
In medieval times, the citizens of Linz had the right to brew beer in their
own houses. In the sixteenth century, they decided to merge their tiny
brew operations and founded one competitive and profitable brewery. With
no method of cooling on the site of the brewing, the beer had to be cooled
in a cellar on the other side of the city.
This 'Marzenkeller' soon became one of the town's favourite meeting
points, and at various times in its history the cellar served as a pub, a
military camp, a restaurant and a theatre. While the "Marzenkeller"
prospered, the Stadtbrau changed owner several times. It was relocated
nearer the cooling cellar, and in 1892, the Linzer Actien-Brauerei und
Malzfabrik was founded.
The history of the Poschacher Brauerei is a pre-industrial success story.
Founded in 1838, the brewery was bought by Josef Poschacher in 1854.
Between 1885 and 1901 the beer output reached the then-considerable
volume of 100,000 hectolitres. It became a stock corporation in 1904/1905
and merged with several smaller breweries in the region before it joined
Braubank AG in 1921.
Little is known about the history of the brewery in Wieselburg, although
there has been a brewing house in Wieselburg since 1568. It changed
hands several times during the 19th century as it prospered and was
modernised. In 1904 the brewery was changed to the Wieselburger
Aktioenbrauerei vormals K. Bartenstein, and thanks to a number of
strategic acquisitions, the brewery soon became number one in the region,
producing 112,500 hectolitres of beer in 1913.
The Salzkammergut-Brauerei in Gmunden was founded as the city brewery
in 1679. Economic and ownership problems resulted in its closure in 1873.
However, the citizens of Gmunden did not want to lose their beer, and a
new brewery was built a in 1886.
The main motive for the five breweries to amalgamate as the Braubank AG
in 1921 was to generate more money for necessary investments and the
development of a distribution network.
From an economic perspective, the early 1920s were a difficult period.
Men returned at the end of the First World War and started to resurrect
their houses and production facilities. But historical business relations with
Bohemia, Hungary and Northern Italy had been strongly affected,
production facilities had been destroyed and no real markets existed. High
inflation increased the economic harshness of the period, and the five
companies realised that by banding together they could pay less for their
raw materials and forge a larger share of the market.
The wisdom of the move is illustrated by the bottom line facts: in 1921,
Braubank AG had a nominal capital of 70 million Kronen. Two years later
nominal capital had increased to 750 million Kronen. Before the merger in
1919/1920, the five breweries produced 274,400 hectolitres; in 1924 they
produced 450,000 hectolitres.
In subsequent years, by a combination of fusion, merger and
acquisition, Braubank grew in size, diversified into mineral water and soft
drinks and changed its name to BBAG (1979).
BBAG finally re-entered Austria's historical hinterland by expanding into
the newly-opened Hungarian market in 1991. It became Brau Union in
1993, when all national and international brewing activities were merged
into a stock-listed company (BBAG survived as a strategic holding
company). The same year, Brau Union entered the Czech Republic market
with the purchase of the Starobrno brewery, followed by the Romanian
market (1997/2000) and Poland (2000).
BBAG was acquired by Heineken NV in 2003, and made an AG.
It incorporated Heineken's Central European operations, and after some
restructuring, its role was strengthened as the Central European Holding-'
and Management Centre.
PAGE 19
