E. Germans Roll Out The Barrel

Two days after East Germany announced what was to be the beginning of reunification of East and West Germany, entrepreneur Jack Dadam headed for East Berlin to carve a place for himself in the East German beer market.

The first shipment of Schuter's Red Star beer from East Germany will arrive in Seattle supermarkets Monday - just in time for the Goodwill Games.

Seattle will be the first U.S. city to try the beer brewed by Berliner Brewing Co. Berliner, which was established in 1869, is the largest East German beer company. East Germany has four brewing companies.

Dadam's California-based company, North American Beverage Co., is the first U.S. company to secure the right of exclusive importer for an East German beer. Distribution in Washington will be handled by Meyers Distributing Co. Inc. in Kirkland.

Meyers will begin distribution today after the first 1,000 cases clear U.S. customs.

Dadam, a former marketing vice president for California's Gallo Wines, said his sales goal for the first year had been 50,000 cases, but he already has pre-sold that amount. His new goal is closer to 500,000 cases.

Atlanta will get the beer in two weeks, followed by New England and Northern California. Dadam says he hopes to have the beer in 40 states by year's end.

The beer will retail from $5.99 to $6.49 per six pack. After reunification of the two Germanys is complete, Dadam said the price may drop. Right now, East German products have higher tariffs and duties because the country does not have favored-nation status under U.S. laws.

Dadam said his main worry in bringing the beer to the United States was finding a distributor.

``My biggest concern was that the beer market was bottlenecked - that there were so many beers already out there that distributors must be turning away new beers. Companies that already have cash cows like Heineken and Beck's probably wouldn't be interested,'' he said.

That wasn't the case.

``The imported beer market is a $1.3 billion business, but it's flat,'' Dadam said. ``But the sale of exotic beers that have never been tasted in the United States is growing dramatically.''

Hal Smith, office manager at Meyer's Distributing, said the company decided to take on Red Star because it didn't have a German beer. Meyer's also distributes Coors and Corona in Washington.

``Everyone I've talked to - retailers and consumers - are sort of waiting for products to come from those countries,'' Dadam said. ``They want to try them.''

Dadam first tasted the East German beer in 1985. He thought the beer was good enough to sell in the United States, but the packaging was designed and controlled by the East German communist government.

``They sold it in these big 500 milliliter bottles with a blue and white label. Sometimes the labels were peeling off and the caps were rusty,'' Dadam said. ``I asked them to change the packaging so they could sell it in the U.S., but they said, `No, we couldn't do that.' ''

On Nov. 21, 1989, when residents of East Berlin began flowing through the Berlin Wall to the West, Dadam headed for East Berlin. Everything had changed.

The 121-year-old company was being taken private, and the new owners were eager to market their beer in the United States. The company invested in a labeling machine to put the new West German-designed labels on a smaller, 12-ounce bottle.

The label sports a large red star and a drawing of the Brandenburg Gate. A green banner across the top right-hand corner says, ``Imported from East Berlin GDR.''

An advertising display reads, ``East Berlin's Best Kept Secret. Now Available in the Free World.'' A case of Schuter's sits on a piece of the Berlin Wall, and the word ``freedom'' is scrawled in blue paint underneath it.

Dadam had 13 tons of the Berlin Wall shipped to the United States as part of his marketing plan. Dadam is offering pieces of the wall by mail order.

Dadam plans to continue bringing exotic beers and other beverages to the United States. He hopes to have a Chilean beer on the market in six months, and he has contacted breweries in Czechoslovakia and Bulgaria.

Closer to home, the company will begin marketing a Georgia mineral water that has been selling locally for 200 years but has never been nationally distributed.