Bars close and hundreds lose jobs as US firm buys Brewdog in £33m deal

Hundreds of people have been made redundant, and hundreds of bars have closed after Brewdog, a craft beer company, went bankrupt.

Tilray, a US brewing operation; its brand; and 11 pubs have been purchased in a £33 million contract.

The sale had preserved 733 jobs, but the loss of 484 jobs and 38 bars had been closed after they were not included in the rescue programme, according to the administrators.

And they said no equity owners, including those who invested in the brewer's Equity for Punks scheme, would profit from the transaction.

Last month, Aberdeenshire-based BrewDog revealed that consultants AlixPartners had been hired in after the company failed to make a buck in recent years. On Monday, they were appointed as administrators.

AlixPartners said there had been great interest in the company but that it had not received any bid that would have kept Brewdog in its entirety.

A total of 38 bars in the United Kingdom will close immediately, resulting in 484 redundancies,

the administrators said.

Unite, which represents thousands of hospitality workers, said it was a devastating day and promised to ensure legal and financial justice for its members.

This brand was created by BrewDog employees, the union's general secretary said. They deserved respect. Instead, they were treated as disposable pawns.

The conduct of senior management, according to Bryan Simpson, Unite's national lead for hospitality, was "nothing short of a national disgrace.

For the CEO to tell workers that they were redundant with immediate effect on a conference call with only 25 minutes notice,

he said. P&O is deplorable.

Tilray will take over BrewDog services, including its brewery in Ellon, Aberdeenshire, and The Hop Hub, a national distribution centre in Motherwell, Lanarkshire.

BrewDog's 18 franchise bars in the United Kingdom and around the world will continue to operate.

Tilray, which was born in Canada but is now headquartered in New York, owns several US craft beer brands.

The agreement, according to the company, represents a major opportunity for expansion in both the United Kingdom and international markets.

The two companies are still negotiating for an agreement on Brewdog's funds in the United States and Australia.

Brewdog's German arm, which includes a brewery and bar in Berlin, was not included in the sale and will be liquidated.

Brewdog, which was founded by James Watt and Martin Dickie in 2007, has four breweries and about 100 pubs around the globe.

On Monday, all its bars were closed to encourage staff to attend staff meetings, and online sales were temporarily suspended.

In recent weeks, a few questions had been raised over what might happen to the company's little investors in the event of a bankruptcy.

Equity for Punks, the firm's fundraising campaign, was launched in 2009.

About 200,000 people contributed to the scheme, which gave the firm a stake, discounts, and perks.

Investors on average spent £500 to £30 on shares costing £20 to £ 30 each, although others invested larger sums.

Equity for Punks is reported to have raised £75 million before the company closed to new investors in 2021, which was used to expand the company to a multinational brand.

TSG Consumer Partners, a US equity company, acquired a 22% interest in Brewdog in 2017.

However, TSG was given preference shares over Punks' ordinary shareholders.

That meant TSG was first in the queue to get back its investment plus any return promised, despite leaving little or no money for small investors.

Any of these individuals correctly predicted that their shares would be worthless.

The company's distillery in Ellon, Aberdeenshire, suspended production of gin and vodka brands last month.

After announcing a £37 million loss, Brewdog revealed job layoffs around the company in October last year.

Ten bars across the United Kingdom, including Aberdeen's flagship pub, were closed earlier this year.

The company employed around 1,400 people.

The company was founded in Aberdeenshire and portrayed itself as a pioneer and innovator in the UK beer industry, which it viewed as stuffy and corporate.

But the firm faced backlash in 2024 after it revealed that it would no longer hire new people on the real living wage, rather paying the lower legal minimum wage.

Former Chief Executive James Watt's behavior was also highlighted in an ABBC Scotland documentary. That prompted a complaint to Ofcom's broadcasting authority, but it was later dismissed.

Watt resigned as chief executive officer and took on the role of captain and co-founder after being promoted to a newly created position.

Dickie left the company last year, saying that he had to make the decision for personal reasons.

How a rebel outsider fell flat

According to David Henderson, Brewdog is now an epic tale of boom and bust. This punk brand, which was apparently born in a Fraserburgh garage, was a marketing dream. The stock had risen to about £1 billion within a decade, but then came chaos. It staggered through the Covid pandemic, then its image suffered, and the last five years have been a traumatic hangover. It didn't make a profit in that period, losing almost £150 million in the process, and it was mired in debt.

In the United Kingdom, the new owners are purchasing what they see as the company's most profitable areas. However, the majority of its UK pubs and their staff will be left behind, and because Brewdog went bankrupt, small investors are likely to pay a premium. They seem to have lost the £75 million stake they acquired through the Equity for Punks programme. In the end, Brewdog, the radical outsider, has fallen flat as a result of any old corporate failure.