BrewDog Staff Lose Out on £500k as Firm Collapses

Former BrewDog staff have lost out on nearly £500,000 owed to them by the collapsed craft beer giant.

Administrators AlixPartners reported that, six months into the firm's winding-up process, there are insufficient funds to pay ex-employees £489,000 in wage arrears and accrued holiday pay. US drinks and medical cannabis firm Tilray acquired the brewer in a £33 million deal in March after BrewDog went into administration with debts exceeding £500 million. The sale resulted in the closure of 38 pubs and the layoff of 484 employees.

The stakes held by 200,000 crowdfunding investors, known as 'Equity Punk' investors, who bought shares in exchange for merchandise and discounts, have become worthless. Staff were informed of their job losses during a 15-minute online call in March, a process criticized by the Unite union as 'morally repugnant'.

Administrators attribute the lack of funds to poor returns from the sale of closed bars, along with additional costs incurred from managing properties and evicting squatters. A report to Companies House stated that "administrators worked alongside landlords and agents to remove the squatters, but the unexpected security and court measures directly reduced net funds available from the retail estate." The sale of several BrewDog pubs also fell through at the last minute, leading to expenses for legal advice and site management.

Financial institutions are also set to lose significant amounts. HSBC will not recoup £16.8 million paid to the brewery, and the tax authority will not recover £2.4 million in unpaid VAT, PAYE, and National Insurance. Unsecured creditors owed £207.6 million by BrewDog Retail Limited will receive nothing. Administrators have warned creditors of the parent company, BrewDog PLC, that they will recover less than 1p for every pound owed. American private equity firm TSG, which invested over £160 million in 2017 for a stake, is expected to receive none of the £27 million it is owed.

Founded in 2007 by James Watt and Martin Dickie, BrewDog was valued at £1 billion in 2017 during a period of rapid growth in the craft beer market. However, rising costs, declining consumer interest, and allegations of poor working conditions led to multi-million-pound losses. James Watt, who recently launched a bid to buy back the firm and has revealed plans for a new brewery, and Martin Dickie each made £100 million from the business.