"Profiteers, Monopolists, Hop Communists!"
History of the Hop Processing Cooperative (HVG) from 1953-2003
By Dr. Christoph Pinzl / German Hop Museum Wolnzach
Cooperatives are a child of the 19th century. In their wake industrialisation and a free market economy unleashed radical social changes. On the plains the well-ordered structures of the village communities increasingly disappeared. Thus peasants who for centuries had worked to feed themselves gradually found themselves independent farmers. Production and earnings were now set by the "market". The new "agricultural entrepreneurs" now had to come to terms with its lack of transparency and its volatility. The cooperative idea tried to pick up the individual farmers in a new collective principle. By granting reasonable loans (Raiffeisen), creating reasonable shopping facilities for agricultural requirements (BayWa) or by joint marketing for agricultural products the idea was to make the members less dependent on market happenings and merchants' goodwill.
Nowhere in the agricultural sphere did the free play of forces on supply and demand develop more unbridled than in hop-growing. As long as the "hop roulette" - promisedhuge profits - at least theoretically - the characteristic up and down in hop prices was gladly put up with. However towards the end of the 19th century when the prices less frequently reached high levels, it was not long before the new kind of cooperative idea also caught on in hop-growing. In 1896 Simon Eisenmann, a vicar in Abens, founded the first hop-marketing cooperative in the Hallertau. Others followed such as the "Bavarian Central Hop-Marketing Cooperative" or the "Hop Bank AG" in Wolnzach. All of them without exception quickly disappeared from the screen after several more or less successful years. Ultimately the reasons were always the same: Firstly, the cooperative solidarity principle was inevitably a thorn in the side of the mighty hop-merchants which is why they boycotted the cooperatives as best as they could. Secondly, it was often the fault of their own members: as in their opinion the cooperatives should only come into action when the hop prices landed at rock bottom. Consequently in good times the solidarity was quickly forgotten and the usual price speculation flourished again in all its splendour. It took a huge hop market crisis as at the end of the 1920s before notice was widely taken of the cooperative idea for the first time in hop-growing. At the initiative of the later President of the German Hop Growers' Association, Franz Edler von Koch, the "German Hop Trafficking Company" was founded In 1930 with its head office in Nuremberg, abbreviated DHVG. Its field of work was above all to be in market simplifying measures i.e. in buying up unmarketable hops in order to maintain the prices. However the "Support" - I.e. the DHVG's honourable nickname among the hop growers - could not act freely for very long. For with the rise of the National Socialists to power in 1933 the DHVG was incorporated in the German Food Law and turned into the "Enforcement Agency of the German Brewing Industry in the German Food Law". Koch withdrew. Out of the mutual benefit association of hop growers there was a central association in which also hop merchants and brewers were now organised.
This commingling was the main reason why the DHVG could not operate very much longer following the collapse of the "1000-year Reich". Only after nerve-racking arguments during court proceedings in 1952 was it converted back to the cooperative agency purely for hop-growers. However a year later when the hop market suddenly collapsed, this also meant the end of the DHVG. It had to declare bankruptcy.
Foundation of the HVG Hallertau
Even If the abbreviation of the name and the cooperative orientation implied it - there was never a concrete link between the HVG and the "German Hop Trafficking Company". On the contrary. The founders of the HVG hastened not to let the mistrust in the cooperative idea, which occurred due to the DHVG bankruptcy, to rub off on its own institution. To this effect it was clearly pointed out that "this cooperative cannot be likened to the DHVG in any way". On the other hand it was no coincidence that the HNG foundation date fell in the year 1953 at the same time as the DHVG bankruptcy. On the one hand the bankruptcy left a vacuum which at last wanted to be filled by the foundation of a cooperative without all the prior encumbrance. Therefore at the invitation of the Hallertau Hop-Growers' Association a multitude of Hallertauer hop farmers, hop officials, regional and agricultural politicians met on 6th October 1953 in the crowded Mainburger Christlbräu and founded the "Hallertau Hop Processing Cooperative" (HVG) with its headquarters in Mainburg. Dr. Jakob Spitzauer (Munich-Gräfelfing) was elected President, Andreas Grabmair (Scheuerhof) Vice-President as well Michael Forstner (Freidlhof) as a further board member. Otto Höfter (Neuhausen) was nominated Chairman of the Supervisory Board, further Advisory Board members nominated were Sebastian Raith (Marzill) and Hans Bergermeier (Siegenburg).
According to the statutes the object of the company was above all intended to be the collective processing and utilisation of hops on an agency basis. "The cooperative primarily wants to strengthen the economic weaknesses through its business facilities and promote the intellectual and moral well-being of the members along the lines "All for one and one for all". Members could all be persons who were farming hops "in the Hallertau seal districts" or who generally wanted to "promote the sale of hops". They did not regard the cooperative at all as a competitor to the hop merchants but only wanted to appear as commission agents.
At the beginning proximity to government and politics was desired. To this effect they were pleased to enrole Dr. Alois Schlögl, the Bavarian Minister of Agriculture at the time as Member No. 1 in the list of members. This political proximity also had a definite reason: Without issuing a state loan guarantee to an adequate extent the new cooperative would have been a blunt sword right from the beginning. However, as it happened in the following months, to issue this loan there had to be a uniform appearance of all the existing hop cooperatives. Following the Hallertau example, HVGs had also been founded in the hop-growing districts of Spalt, Hersbruck and Rottenburg-Herrenberg-Weilderstadt (RHW); the hop cooperative Rhein-Palatinate had already existed since 1936. Therefore, at the beginning of 1954 under the patronage of the "Bavarian Commodities Agency" (BayWa) all cooperatives founded jointly the "Cooperative Hop Processing Headquarters" with its office in Nuremberg which existed up until 1971. Incidentally within the framework of this foundation this was the only concrete "successor" to the DHVG: The Hop Processing Headquarters took over the building and its equipment from their insolvency estate.
Despite the few points of contact: After the DHVG crash there was great mistrust among the hop-growers towards everything cooperative. Therefore, at the beginning the membership in the HVG Hallertau developed extremely cautiously, only a few hundred hop-growers joined. So the members of the board had to complete a marathon of informative meetings all over the Hallertau finally in order to report a membership of 4,366 for the 1954 crop - which at that time was 57 percent of all the Hallertau hop-growers.
In retrospect this first hop crop in the history of the cooperative left a somewhat ambiguous impression. The HVG received 28.1 %, actually about 58,500 centners of the crop. Unfortunately only about 50 % of these hops could be sold at the predetermined price level, the remainder left the store at considerably lower prices. On the other hand the justified question was raised whether these prices would have been even far worse without the efforts of the HVG. Conclusion: "The HVG Hallertau had solved an economic task with business methods but at the expense of their prestige".
Obviously, at the beginning the hop-growers though were not easily convinced about such a differential view of the matter. A resolution in 1955 wanted to bind each member of the HVG to relinquish 10 % of his hop production to the cooperative - which neither took place in practice nor was force exerted by those responsible at the HVG. So in the same year the HVG Hallertau received only about 2,800 centners of hops which meant that their chances to regulate the market happenings were bound to be fairly modest. In the crop year 1957 with its proliferating price development - for a short time up to 1,200 deutschmarks or more were being paid per centner - the HVG then deliberately steered clear of the general speculative frenzy. The reason was not only that the hop-growers were earning enough even without the cooperative and preferred to sell the hops independently. The HVG also saw their policy of regulating the market also in setting upward limits for all too wild profiteering. Fancy prices as in these years only resulted in the "boom hop-growing" - with the well-known consequences for the following crop years.
As if by order, the next year the initially good prices continually dropped during the course of the marketing period and ultimately landed far below the level of the farm advance credit which the HVG had already granted its members. There was no alternative but to make reimbursement demands on the members, here the sentiments of the hop-growers need not be recorded any further. Although the price level In the following year was very poor the hop-growers only supplied the HVG with 6,000 centners of hops for processing.
At the same time however the year 1958 also brought a very positive result for the HVG. In Mainburg the erection of a hop hall equipped with state-of-the-art technology reached completion and so the area of an existing hall built in 1954 was considerably extended. The festive inauguration was held on 30th October. Thus the cooperative signalised right from the beginning how important the criterion of quality control and maintenance were for the hops it marketed.
Later on Hermann Schlicker, for decades the managing board member of the HVG Hallertau, once judged the task of the HVG in this first phase up until 1959 as being in a purely "price-supporting function". The year 1960 brought inasmuch a radical change as here the decision matured to gradually relinquish the commission business in favour of a stronger orientation towards contracted hops. For Schlicker this was synonymous with a final change by the HVG towards a leadership in compliance with "entrepreneurial aspects".
This changeover to the forward contracts system therefore not only for the hop-growers meant a considerable upheaval in the history of marketing hops. That the path chosen was the right one was reflected not least in the stable HVG membership and a simultaneous constant increase in the hop quantities marketed year for year. In 1966 the proportion of contractual hops was already around 90 %.
In 1968 the HVG took an important step with regard to market regulation. It participated in the Hopstabil GmbH, which operated a big facility for hop powder in Wolnzach under the same name. Consequently for the first time they could bring their own already fully mature hop product onto the market.
The year 1973 perhaps saw the most important milestone in the cooperative history. At the instigation of the Bavarian Ministry for Agriculture the HVG was constituted as a producer group In compliance with the EEC market regulation. This new status of the HVG not only made extensive changes to the statutes necessary which finally reached completion in 1978. Now for the first time all members of the producer group were entitled to apply for producer subsidies for measures relating to stabilising the hop market. The allocation of these subsidies were immediately the responsibility of the Hop Processing Cooperative. In practical hop-growing this once again meant considerable greater concentration on quality and the choice of hop varieties.
With the 1974 crop, in the end the HVG marketed more than 50,000 centners of hops. Meanwhile their position on the market was so strong that for the first time they began to extend their activities also to other hop-growing regions. Thus their commercial pursuit for the first time led to the Hersbruck hop-growing region where the cooperative there had already failed in 1966.
1975 bis 2003
Such a strong position on the hop-trading scene inevitably brought the HVG not only positive reactions. Above all its significance within the EEC Hop Market Regulation caused many a rude comment. They had to put up with names such as "profiteers, monopolists, hop communists" complained Hermann Schlicker for example at the members' meeting in 1978.
This hop year was to become a "hot year" in many ways for the HVG. Not only because at the beginning of November a fire broke out in a hop kiln in the Mainburg processing hall, which not only destroyed the kiln but also 80 centners of the hops stored there. So at the subsequent members' meeting the HVG managing board announced its decision not to pay out the producers' subsidy to their members for the year 1978. On the contrary they wanted to use the money for measures to stabilise the market, actually using part of the money to participate in a hop processing facility and with the rest to build up a hop pool to comply with the American model. It was foreseeable that this decision would trigger off a "discussion" in the meeting. "But out in the open "it developd into a "major opposition" among the hop-growers. In the end at a subsequent extraordinary members' meeting the majority of those attending voted against the decision and for half of the subsidy to be paid out. But a year later when the idea of retaining the subsidy came up again, there was already a different "atmosphere", according to the reporter at that time: a retention of the subsidy was voted by the majority.
Therefore in summer 1982 they were able to set up the "HVG Hallertau Holding Company with limited liability, with headquarters in Wolnzach" (Managing Director : Hermann Schlicker). It was their sole task to acquire and hold "shares in hop processing firms". Straight afterwards the HVG participated in the Hop Refining HVG Barth, Raiser & Co. in St. Johann and in Wolnzach.
As for how to handle the producer subsidy in the following years there were again and again nerve-racking discussions within the HVG. However, not least the increasingly strained situation on the hop and brewing market resulted in the hop growers joining closer together. This also became apparent in the so far last big step taken by the HVG when at the turn of the century the still existing regional cooperatives such as Elbe-Saale (2000), Jura (2001) or Tettnang (2001) merged into the HVG and henceforth were known as the "HVG Hop Processing Cooperative e.G.". Except for the hop growers in the Spalt hop-growing region nowadays the hop producers from all the German hop regions are members of the HVG Hop Processing Cooperative in Wolnzach.
In the summer of 2003 the HVG was able to move into their newly built administrative building in Wolnzach. Their direct neighbourhood to the German and Hallertau Hop Growers' Association, to the Hop Advisory Committee of the Bavarian State Research Centre for Agriculture (LfL) as well as to the newly built German Hop Museum in a striking way symbolises the status of the HVG as a customer-oriented as well as producer-oriented hop-trading firm, a status which can meanwhile look back on a tradition over half a century. The 50th anniversary of the formation date of the HVG was on 6th October 2003.
Analogous to the Hallertau activities a Hop Processing Company (HVG) was also founded in 1955 in Tettnang. This endured the same conditions as its Bavarian "sister". Though there had been no further discussions on paying out subsidies since 1975 because the HVG Tettnang had merged into the "Hop Producer Group Baden-Wurttemberg" (headquarters in Tettnang) conforming to the EEC. This embraced all the locally operating trading firms and by including the hop growers' association was more or less provided with a double identity. In other words the entire crop "ran" over just this producer group. First of all the subsidy was fully passed on to the growers. When the EU adjusted this regulation, the mandatory 20 percent remained with the group - for quality and market support and therefore for stabilizing the prices.
These requirements in an increasingly difficult market finally resulted (2001) in their merging with their bigger partner, the HVG e.G. (Wolnzach) with a similar area of work.
The HVG Elbe-Saale was founded in August 1990 in Fürth. The first attempt to establish it in May 1990 in Saxony had failed because at the time it was not possible to register it yet in Leipzig. Others soon joined the 7 founding members. Finally the HVG Elbe-Saale counted 60 members. The initial period of the HVG Elbe-Saale happened to fall in a phase when the hop acreage in the Elbe-Saale region was reduced by about a third. Throughout the 1990s the hop acreage in the region as well as the marketing activities of the HVG Elbe-Saale were stable. In 2000 the HVG Elbe-Saale finally merged with the HVG Hop Processing Cooperative e.G.
The HVG Jura was founded in September 1954. From the beginning there were very close connections to the HVG Hallertau. The Managing Director of the HVG Jura for many years was Mr. Trapp of the HVG Hallertau. However, due to the strong concentration in the brewing sector but also among the hop-trading firms themselves the market position of the small regional company HVG Jura became increasinglydifficult. Therefore the HVG Jura was absorbed in 2001 and became part of the HVG Hop Processing Cooperative e.G.
Survey on the directorates of the HVG Hallertau and today's HVG Hop Processing Cooperative e.G 7
ARV = Chairman of the Supervisory Committee
VSV = President
sVSV = Vice-President
wVS = other directors
GF = Managing Director
|VSV||Dr. Jakob Spitzauer|
|ARV||Otto Höfer||Sebastian Raith||Dr. Josef Maier-Kraft|
|VSV||Andreas Grabmair||Josef Schrag||Michael Forster|
|sVSV||Josef Schrag||Michael Forstner|
|ARV||Dr. Josef Maier-Kraft||Leo Höfter||Hubert Grabmair|
|sVSV||Hubert Grabmair||Josef Schwarzmeier|
|ARV||Hubert Grabmair||Wolfgang Forstner|
|VSV||Michael Forstner||Herrmann Schlicker||Leo Höfter|
|wVS||Herrmann Schlicker||Wolfgang Schlaffer|
|ARV||Wolfgang Forstner||Michael Bogensberger|
|VSV||Leo Höfter||Dr. Johann Pichlmaier|
|sVSV||Josef Schwarzmeier||Wolfgang Schlaffer|
|wVS||Wolfgang Schlaffer||Wolfgang Forstner|
|Dr. Johann Pichlmaier|
|ARV||Michael Bogensberger||Adolf Scharpfl|
|VSV||Dr. Johann Pichlmaier|
|Dr. Bernhard Locher|
|GF||Dr. Johann Pichlmaier|
Volume of hops marketed
1 author Peter Heidtmann (Tettnang)
2 author HVG Hopfenverwertungsgenossenschaft e.G. based on the brochure "10 years HVG Elbe-Saale e.G."
3 author HVG Hopfenverwertungsgenossenschaft e.G. based on the brochure "10 years HVG Elbe-Saale e.G."
4 compiled by the HVG Hopfenverwertungsgenossenschaft e.G. in July 2003
5 compiled by the HVG Hopfenverwertungsgenossenschaft e.G. in July 2003
6 p until 2000 only the volume of the former HVG Hallertau 7 compiled by the HVG Hopfenverwertungsgenossenschaft e.G. in July 2003