Family member and Underberg supervisory board member Ludwig Ruder talks in an interview about inheritance tax and the success of the traditional brand - and he surprises with a confession.
180th anniversary celebration at Underberg: Ludwig Ruder chose the path to the family business via the supervisory board. Photo: © Underberg, Kramer
Rheinberg. Ludwig Ruder, representative of the sixth generation of the family, has been one of the seven secret keepers who know the recipe for the Underberg herbal bitters for over a year - he has been deputy chairman of the supervisory board of Semper Idem Underberg AG since 2024.
In his first interview as a supervisory board member, Ruder speaks in the Handelsblatt about the upcoming hearing at the Federal Constitutional Court on inheritance tax. The tax could affect Underberg because the generational change has not yet been completely completed, says Ruder.
The 35-year-old also provides insights into the transformation of the traditional brand. “Some billion-dollar multinational companies have more marketing budgets than we have sales,” says Ruder, while also pointing out that they are growing in a shrinking market. He draws his optimism from successes abroad, demand from a younger target group - and a surprising moment in the New York subway.
Mr Ruder, on Tuesday there will be an oral hearing at the Federal Constitutional Court on the exemption of business assets from inheritance tax. Would a possible change still affect you?
A change in inheritance tax would affect us. We have sorted out the current generational change in the family, but have not yet completed all the steps.
What is your general opinion on inheritance tax?
I am part of our society and like to contribute something to it, including by paying taxes. The more important question is: What problem do we want to solve with inheritance tax? If a country has had virtually no economic growth for six or seven years, then higher taxes on companies or entrepreneurs are not beneficial.
Where do you draw the line?
An inheritance tax on private assets is absolutely sensible. But I think it is dangerous for overall economic development if shares or the company's substance are taxed in such a way that profits are no longer invested in the company, in employees or in brands, i.e. in growth, but instead flow into inheritance tax. In short: inheritance tax must not prevent investments. Otherwise there will be no growth and prosperity will decline. This is where a society cuts itself into its own flesh.
Ludwig Ruder grew up in Switzerland, far away from where Underberg was founded in Rheinberg (Lower Rhine), at the headquarters of the parent company. He studied molecular biology, started his career at the strategy consultancy BCG and during this phase he went to the USA for two years. Today he works for a large family-run and listed Swiss pharmaceutical company and has been deputy chairman of the supervisory board and secret holder of the Underberg recipe since last year. Only his grandparents, his mother, he and three clergymen know the recipe.
In 1846, Hubert Underberg founded the spirits company on the day of his wedding to Catharina Albrecht. They built the original building in 1869, and their son Hubert II had the “Underberg” brand registered for the bitters in 1896. The name of the parent company “Semper Idem” goes back to the “always the same” quality and goodness of the drink. Today it also includes the brands Brasilberg, Hubertus-Tropfen, Pitú, Asbach Uralt and the vodka specialties Xu Xu and Grasovka. Underberg also sells other distribution brands, including the Hungarian Unicum, Bols and Linie and Malteserkreuz-Aquavit. Net sales without alcohol tax were 137 million euros in the 2025/2026 financial year, and operating profit before interest, taxes, depreciation and amortization was 12.3 million euros. The parent company's annual result before profit transfer was 6.5 million euros.
Do you understand that a feeling of injustice is developing in Germany because people have the impression that achievement is no longer worth it?
I want performance to be worth it. I am employed, pay taxes, live in a normal terraced house and do volunteer work. But I see that current and future generations have challenges that our parents did not know. This feeling of injustice is growing – and it is dividing societies.
Should entrepreneurs take action against the division?
Yes. As entrepreneurs, we have a certain responsibility that goes beyond paying salaries and taxes. We can create an atmosphere of belonging, listening and engaging in the region beyond the company. That's what we do at Underberg.
Your company has now existed for 180 years. According to studies, the willingness of entrepreneurial families to sell their companies is currently increasing. Would that also be conceivable for Underberg?
No. Underberg wouldn't function without family. We have been very closely interwoven for 180 years.
But your family business was once significantly larger and once generated sales of 500 million euros. In 2014, your family sold, among other things, the Schlumberger sparkling wine brand. Sales now stand at 137 million euros. What did you learn from it?
We were certainly too broad at the time. I think it's incredibly important for a medium-sized company to focus. Some multinational billion-dollar companies have more marketing budget than our sales. We have grown by around 20 million euros since 2019, we are making a profit - in a shrinking market.
Underberg issued one of the first medium-sized bonds in 2011 - i.e. refinanced via the capital market. The vast majority of family businesses shy away from this transparency. Why did you choose this?
We are established on the capital market and valued as an issuer - I don't know it any other way. We have now issued seven bonds, which were almost always oversubscribed and offered an attractive interest rate. I believe it leads to professionalization in reporting, but also in marketing. We are transparent – our private and institutional investors value this equally.
The family business consultant Arnold Weissman says: A capital market-capable company that is completely in family hands is an - even rarer - ideal case for today's disruptive times. Does this make Underberg fitter?
I wouldn't say that more transparent immediately means fitter. There is much more to it: strategic consistency and, above all, your own discipline.
What exactly?
We question every investment even more, and strategic decisions are also justified more professionally and transparently. The perspective of a board member outside the family also helps us.
Underberg CEO Michael Söhlke recently indicated that he no longer wanted to rely solely on bonds. Is this a change of strategy?
This is not a fundamental move away from bonds; it is more about broadening our financing base in the long term. We know bonds well and will continue to use them for financing. At the same time, we are now also discussing other financing models. We want to reduce the amount of bonds in the long term.
Do you want to increase your equity ratio, which is just 31 percent? Many family business owners of your size often have more than 50 to 70 percent.
Yes. We want to reduce external debt in the long term.
You grew up in Switzerland, lived in the USA and are now living in Switzerland again. How do you view Germany as a location?
We should not get carried away by any negativity. Our company is rooted in Germany. This is our location and we rely on it. In addition to our ongoing investments, we will invest three million euros in a new production line in Rüdesheim in 2027 alone. That's two percent of sales.
So it doesn't matter to your decisions who is in power in Germany?
Of course not. But I don't have to let negative moods discourage me. No matter whether in Rüdesheim or here in Rheinberg, I see a lot of strength, creativity and the will to change something. So we don't need any tailwind from politics, but we don't need any headwind either. Entrepreneurship means positivity.
In Germany, your industry could be burdened by alcohol tax in the future. A sugar tax was also a recurring topic in Berlin. How does this affect your business?
We already pay alcohol tax of around 30 percent of our gross sales. Consumers will notice the planned 20 percent increase on the shelf: depending on the product, the price will increase by between 50 cents and two euros.
Do you pass the tax entirely on to consumers?
Yes, the margins for spirits are narrow and are under constant pressure due to competition as well as rising raw material prices and manufacturing costs. We have to pass this on. But something else is important to me.
What?
The bottom line is that the alcohol tax is a “spirits tax”. This means that the prices on the wine rack - with the exception of sparkling wine - or the prices for the beer crates next to them do not change.
Because spirits contain much more alcohol.
No, the tax rate for beer is not affected by the increase, and all types of wine except sparkling wine are still exempt from excise tax. At the same time, rising taxes are likely to be a distraction, but will hardly generate the desired revenue. Many countries have played with alcohol taxes, Scandinavia, Canada, etc. The result: sales fall, but tax revenue does not increase. What remains is unequal treatment.
It will affect all spirits manufacturers in Germany.
I assume that most of them will therefore also increase their prices.
But the threat arises when a foreign manufacturer enters the market and can cross-subsidize. Their foreign share is just 17 percent.
That would be a problem for all domestic manufacturers, especially since most are medium-sized companies. However, our foreign share has been increasing for several years and grew by a good nine percent in the 2025/26 financial year. At Underberg the export share is now over 50 percent, and at Xu Xu it is even higher.
The USA is your most important foreign market. There, Underberg is not classified as a spirit, but as a food. This is positive for taxes. But you still had to pay customs duties. Have you already asked for it back?
Yes, the USA is one of the most important foreign markets for the Underberg brand. And we have claimed back customs duties, but no refund has arrived yet.
Why is Underberg popular in the US?
Younger people definitely drink Underberg there. When I lived in New York, I saw a man on the subway wearing an Underberg T-shirt that I was completely unfamiliar with. I'm the reserved type and had to force myself to ask him about the T-shirt and what connected him to Underberg. But I did it. And then he asked me if I knew Underberg.
And then you said: “I am Underberg”?
No, I didn't identify myself, I just said that I came from Germany. The man explained to me in detail that Underberg was a unifying element in his group of friends. There are many passionate Underberg fans in the USA.
Is there a similar boom in other countries?
Yes, in Scandinavia. In Denmark, for example, per capita consumption is higher than in Germany. The younger target groups in particular – Millennials and Gen Z – drink Underberg there. And with Brasilberg we are the market leader in Brazil with 65 percent...
...the Underberg in Brazil, which is brewed there by part of the family using their own recipe.
Yes, it is now a substantial growth driver for us. Our international focus markets are Scandinavia, Brazil and the USA. But we are also growing in neighboring European countries – and in Africa.
How did Underberg get there?
There were and are German communities in Namibia and South Africa that are not small. Not to forget: the bitter flavor is very popular there. And South Africa is also home to the only place in the world called “Underberg”. (laughs)
The herbs for Underberg's recipe come from 43 countries. How do the geopolitical crises affect procurement?
We soon built up a reliable supplier network over centuries, with multiple sources in the individual countries. But that doesn't always work: we had to find a replacement for Afghanistan at the time. The fact that Underberg stopped production during both world wars shows that geopolitics has always preoccupied Underberg.
Are the Hubertus drops that your grandparents once bought the way to reach the younger target groups?
Yes, they belong more in the party corner. We have quite successfully created a liqueur supplier with different variants from a pure herbal liqueur brand: peppermint, currant, licorice, sour peach. We are on the right track there.
However, compared to their competitor Jägermeister, they are late with the rejuvenation. Is Underberg currently reinventing himself?
Let's say we transform. Underberg is unmistakable. We have edge. Apart from that, we are constantly thinking about how we can reach new target groups with our brands. This is where our employees also discover entrepreneurship. For example, Asbach's brand manager had the idea of going to the Parookaville music festival in Weeze. Since then we have been regular guests there, running an “Asbach Urretsheim” with its own DJ – and my grandmother is sometimes there too.
