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Saturday, August 06, 2011

People's Republic of Beer

"How one man’s yeast research is propagating China’s craft beer culture"

I read an article about the proliferation of micro-brewing in China in Beer West magazine this afternoon while sipping a glass of Pinot Gris at Southern Oregon Brewing Company, our neighborhood brewery and taproom where my parents are regulars. Unfortunately S.O.B. doesn't offer any gluten-free beers, so I'm restricted to wine (but really, with a plethora of award-winning Southern Oregon wines at my fingertips, I can hardly complain).

Visiting with my Grandpa Rick at Southern Oregon Brewing Co.

What stood out to me most in this article about Yan Gao's new enterprise is his innovative solution to the obstacles posed by China's often hostile business climate, which can be especially unfriendly toward small businesses. Beer West's Emily Hutto writes,

"While microbreweries in the U.S. receive tax breaks if they're producing under a certain amount of beer, microbreweries in China must comply with macro-brewery laws, which dictate higher tax rates and expensive facility requirements that most small breweries can't afford. That is, unless they find a loophole.
Yan Gao inspecting yeast cultures in his lab.
photo by Bjoern Walter
In 2008, Gao opened Nanjing's first microbrewery, Oktoberfest Biotech Co.
While friends and imbibers recognize Oktoberfest as a fully-licensed production brewery, the state recognizes it as a yeast research firm. It's illegal for Chinese companies to dump their byproduct, in this case beer, so Gao drinks and sells it instead. 'I know how to deal with those dummies,' he says of the Chinese government. 'In order to grow yeast, we need to make beer. And in order to save the environment, we need to "recycle" the beer.'"

I love this nothing-will-stop-me entrepreneurial spirit and passion for his craft.  

Earlier in the article, Hutto quotes Gao's statement that "Beer in China is like water."
She goes on to explain Gao's beginnings, telling the story of how he complained to the owner of a local cafe one night about the bad beer they were serving and bragged about his own brewing skills. "The owner said, 'If you can brew it, I will sell it.' And that's where we are today," says Gao. 

"Upon opening Oktoberfest, Gao immediately attracted followers, who quickly became fanatics, begging him to provide them with homebrew supplies and more advice. Now, in addition to extensive 'yeast research,' Oktoberfest also sells basic homebrew supplies to get new brewers started.  In the first three months, it sold to more than 100 customers, all of whom will be overjoyed to learn that Gao is authoring a new how-to book, Drink Your Own Brew! He will be the first Chinese author to write a book (in Chinese) about homebrewing."

I think this is such a neat story! My thesis research has me reading all sorts of articles about the formation of entrepreneurial intentions -- the process of a potential entrepreneur deciding to start a business.  Just yesterday I read an article published last month about a recent study which investigated the presence and formation of entrepreneurial intentions in developing countries (such as China, Russia, and Brazil) versus developed countries (USA, France, Australia, etc.).  Among other specifics, the results of this study found that "Students in developing countries report significantly higher intentions...than students in developed countries." Researchers behind this study write, "These findings support our argument that entrepreneurial activities can flourish in more turbulent environments, and that a combination of constantly appearing new opportunities in the market together with uncertainty about the future, even with a salaried job, may stimulation young people to engage in entrepreneurial activities."

Of course it's interesting to read about the theoretical implications of such studies, but I find it even more exciting to discover first-hand the real life experiences of entrepreneurs who battle excessive red tape and oppressive tax laws with innovative thinking to make their business ideas a reality.  And it's great to hear when, like Yan Gao, they come out on top!

The beginning of this article, "People's Republic of Beer," can be viewed on Beer West's website: http://www.beerwestmag.com/the-magazine/peoples-republic-of-beer/
You will need to subscribe to the magazine (at least the online edition) in order to read the full article. 


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