Bayern have been pursuing Woltemade for the entire summer, but refused to meet VfB Stuttgart's asking price.
In contrast, Newcastle have agreed to pay a club record £69m to sign the 23 year-old centre-forward.
It's the second summer blow for Bayern, which experienced similar disappointment as Florian Wirtz chose Liverpool ahead of the German giants when leaving Bayer Leverkusen at the end of last season.
"Bayern Munich is Bayern Munich, a very, very big club," said Freund. "The boys can win titles here, we can offer them very interesting options internationally, and domestically as well.
"It's always the player's decision. We at Bayern Munich are very, very attractive, we notice that again and again when we talk to players. Financially, the Premier League is in a different league. You have discussions, you have a certain relationship.
"Ultimately, it's the player's decision as to what's the best step for his career. We're not involved in that. The sums of money involved; how much money is at stake; that they have brutal opportunities in the Premier League. Not just two or three clubs, many clubs. Newcastle is a good club, but not the top tier."