Water-filter maker Brita encapsulates German trade surplus controversy

Water-filter maker Brita encapsulates German trade surplus controversy

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Known the world over for its water-filtering jugs, the small German family-run firm Brita typifies the “Mittelstand”, small and medium-sized businesses that form the backbone of Germany’s economy and have turned it into an export powerhouse both envied and resented by its trading partners.

It’s a long way from Brita’s headquarters in Taunusstein, a small town nestled in the forests west of the financial capital Frankfurt, to Berlin, where Chancellor Angela Merkel is widely expected to secure a fourth term in a general election on Sunday.

Nevertheless, the quiet strength of Brita—and of thousands of Mittelstand firms like it—exemplifies the country’s economic success, where Germany’s record trade surplus may well be flattering for Merkel’s image, but is also the source of tension and mistrust with other countries.

“Germany’s export strength is very closely tied to the quality of the products, to the ‘made in Germany’ brand that embodies the country’s mindset, its attention to detail,” says Markus Hankammer, who has run Brita single- handedly since 1999.

That is a sentiment very much echoed by Vice-Chancellor Sigmar Gabriel, who earlier this year urged American automakers to simply “build better cars” in response to a jibe from Donald Trump that there were too many Mercedes on New York’s streets.

And when the US president—whose “America First” slogan helped put him in power—singled out German titan BMW with threats of hefty import taxes on its cars, he met with puzzlement in the automaker’s Munich headquarters, where executives noted that their largest factory is in fact in the US state of South Carolina.

But Washington is far from alone in grumbling about Germany’s huge trade surplus.

International institutions and even Germany’s closest European partners regularly charge Berlin with failing to invest enough at home or import sufficiently from other countries, allowing harmful trade imbalances to build up.

Who dares, wins –

Brita was set up by Markus Hankammer’s father, Heinz, in 1966. Named after Heinz’s daughter, the family-run business specialised in demineralising water for car batteries.

It wasn’t until 1970 that Heinz Hankammer invented the filtering jugs that have powered sales ever since.

Like competitors in the field, Brita promises better-tasting water, coffee and tea, but also less limescale buildup in kitchen appliances.

Today, Brita’s revenues amount to 469 million euros ($559 million) per year, 80 percent of which are generated abroad.

It employs a workforce of 1,700, half of whom are based outside Germany, proof that the good health of German companies can also benefit the countries in which they do business.

Markus Hankammer credits Brita’s success to his father’s “very early decision to go abroad, at a time when the business was still very small and financial resources very limited.”

The company moved into Britain to woo tea-drinkers in 1988, before expanding across Europe and beyond.

Today, it boasts operations in 60 countries, from Russia to the United States and South Africa, selling through dealers and around 20 subsidiaries.

“A sizeable chunk of our growth comes from conquering new markets,” says Hankammer, who hailed Brita’s ability to adapt to different consumer preferences around the globe.

“Chinese people drink hot water or tea, whereas Australians like it iced. In most countries people drink flat water, but in Germany, they prefer it sparkling,” he explains.

But exposure to the wide world entails risks: the fall in the pound since Britain voted to quit the European Union “has cost us a lot of money,” Hankammer admits.

Nevertheless, bigger opportunities beckon, such as the unstoppable growth that has made China Brita’s largest market, prompting the firm to open a factory there this summer to add to its foreign production sites in the UK, Switzerland and Italy.

For his part, Hankammer is a fan of the free-trade system that underpins his business, arguing that Trump’s criticisms of German exports were “misdirected”.

“Protectionism has never helped anyone at all,” Hankammer insists, reports AFP, Taunusstein, Germany.

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