Private Eye’s analysis of ‘Crafty Brewers’ Brewdog

Private Eye’s analysis of ‘Crafty Brewers’ Brewdog

Update

Radio 4’s Food Programme (10th Jan 2021) has run an entire edition on Brewdog:

https://www.bbc.co.uk/sounds/play/m000r318

Hosted by brewer Jaega Wise (WildCard) with commentary by beer writer Pete Brown and containing a Zoom interview with Martin Dickie and James Watt it was decently balanced on the impact Brewdog has had and some of the issues- sexist advertising stunts for example. Pete Brown underlined that Punk is not the complex beer it once was. The financial structure of the Company and the EFP schemes didnt get much scrutiny, probably reasonably enough as it was the Food Programme. That said the post below summarising a piece from Private Eye in March 2020 still gets regular hits.

One wonders if Brewdog will end 2021 as an independent brewer..

The current issue of Private Eye (1517) carries a lengthy analysis of the structure and finances of Brewdog. Private Eye generally eschews such new-fangled things as the interwebs so you’ll have to buy a copy. It costs rather less than half a pint of Punk IPA.

The piece is interesting because Brewdog is far from transparent about how it works despite its Equity for Punks ‘ownership’ scheme.

The nub of the Eye’s analysis is contained in these sentences

‘it is not suggested that any of these transactions are illegal or improper. The question is whether they are appropriate for a company with 100,000 other shareholders’

Of interest it notes that while a profit of £3.8m was made in 2016 this had reduced to £1.4m in 2017 and by 2018 had become a pre-tax loss of £576,000

It also notes:

When the  private equity deal with TSG was announced in April 2017, it was stated to have involved a total of £213m, including £100m for new shares to fund Brewdog. The normal private equity playbook would look for an exit by sale or listing within five years

The Eye analysis focuses on a Company named JBW77 that appears to be linked to Brewdog founder James Watt and various holdings, transactions and deals that it has been involved in. As a union official that deals with very large companies (which Brewdog is not) I’m not sure there is anything hugely unusual about it.

The issue of course lies between how Brewdog markets itself, as a sort of rebel against the traditional beer industry, and the reality of the business it carries on which might well be described as traditional.

Perhaps in the end it comes to down to whether you think the beer is any good or not. My view, hardly secret, is that this varies between types of beer. The imperial stouts are generally very good as are the stronger IPAs. The core range is perhaps less distinctive.

If you are looking to give two fingers to market focused brewers though, look elsewhere.