Craft beer giant Brewdog abandons real living wage for new employees

[Chippy_Tea]

Made £321m after losing £24m it must be scary to make so little and be forced to cut the pay of new employees in hope they can get back to profitability, how much profit do they need

The Aberdeenshire-based firm said the move was "necessary" as part of an effort to return to profitability after making a £24m operating loss last year.
But former staff have accused the company of "abandoning its principles".

Craft beer giant Brewdog will no longer pay its new employees the real living wage.

Brewdog, co-founded by James Watt, recorded a £321m profit last year

Workers will receive the UK government's national minimum wage of £11.44 an hour from April - below the £12 cost of living-based rate.
The Aberdeenshire-based firm said the move was "necessary" as part of an effort to return to profitability after making a £24m operating loss last year.
But former staff have accused the company of "abandoning its principles".
A letter to employees, seen by BBC Scotland News, said "hard decisions" had to be taken in order to maintain financial stability despite a "bumper" festive period.
Brewdog, founded by James Watt and Martin Dickie, had paid the voluntary wage since 2015.

Bryan Simpson, hospitality organiser of Unite, said: "To withdraw the real living wage now, during the most acute cost of living crisis in a generation is outrageous.
"We are already working with our Brewdog members across the country to collectively challenge this awful decision and force the senior management of the company to do the right thing by the workers who have made them millions."
The real living wage is independently calculated based on living standards in the UK and is separate from the government's national living wage.
The rate will increase to £12 an hour outside London and £13.15 for workers in the English capital on 1 April in line with inflation.
Brewdog staff over the age of 23 will receive a slight pay rise, but only from £10.90 to £11.44.
Those working in London will see no increase from their current rate of £11.95.

Blog posts on the brewer's website referencing its status as a living wage employer have been removed.
The Punks with Purpose campaign group for ex-workers, set up amid mistreatment allegations in 2021, said: "The real living wage has been a cornerstone of BrewDog's public identity for years.
"This real-terms pay cut for hard-working front line staff proves there is no principle too dearly held for them to abandon and is directly opposed to BrewDog's previous claim that their 'crew are their most important resource' and giving them fair pay for the work they do is one of their 'core beliefs'."
Brewdog's revenue grew to £321.2m in 2022-23 but it blamed a £24m operating loss on increased production costs for its most popular product, Punk IPA, and rising energy bills at its Ellon plant.
Its co-founder, Mr Watt, previously apologised to staff after a BBC Disclosure documentary in 2022 heard claims of inappropriate behaviour
A spokesperson for the company said: "As a result of the changes we're making - and despite unprecedented challenges in the hospitality sector - our staff outside London will be getting a 4.95% increase in base pay, and crew currently working in London will be paid 4.5% above the National Living Wage.
"We have always been fully committed to doing the best we can for our people, and our benefits package is far more generous than the industry average"

 

[Brew_DD2]

Made £321m after losing £24m it must be scary to make so little and be forced to cut the pay of new employees in hope they can get back to profitability, how much profit do they need
rewDog's public identity for years.
"This real-terms pay cut for hard-working front line staff proves there is no principle too dearly held for them to abandon and is directly opposed to BrewDog's previous claim that their 'crew are their most important resource' a

Not to defend them, but they made a loss of £24m, no? The £321m refers to turnover.

 

[Chippy_Tea]

Not to defend them, but they made a loss of £24m, no? The £321m refers to turnover.

It says profit in the article -

Brewdog, co-founded by James Watt, recorded a £321m profit last year

 

[Clint]

It more likely means they're DOWN 24 million on the previous year so see it as a "loss".
Typical reptile behaviour.

 

[Chippy_Tea]

It more likely means they're DOWN 24 million on the previous year so see it as a "loss".
Typical reptile behaviour.

That's the way i read it Clint.

 

[Clint]

I had this conversation with some managers at a place I used to work when they were pleading poverty at wages talk time.
As said so...this loss...you've spent ALL the money and also money you didn't have,so the accounts are in MINUS figures and you either OWE money or facing BANKRUPTCY??
Err.,no was the answer.

 

[Brew_DD2]

It says profit in the article -

They've since changed the article since it was gobbledygook. They made a loss of £24m last year. Revenue was £312m as stated in the original article. Not profit.

 

[Brew_DD2]

I had this conversation with some managers at a place I used to work when they were pleading poverty at wages talk time.
As said so...this loss...you've spent ALL the money and also money you didn't have,so the accounts are in MINUS figures and you either OWE money or facing BANKRUPTCY??
Err.,no was the answer.

Unless the business started that year then of course a business can lose money on any given year. Businesses generally have savings/credit facilities. Making a £24m loss doesn't necessarily mean you owe £24m.

 

[Brew_DD2]

That's the way i read it Clint.

That's not what an operating loss is.

 

[Brew_DD2]

Despite this, it's a really ****** move for a brewery that has trumpeted it's credentials in this area for years. James Watt is a certifiable prick.

 

[AJA]

And accounting losses don't really matter anyway. I imagine depreciation covers the majority of that loss. EBITDA still positive and revenue up to record levels.
They can afford to increase pay.

As a general rule, businesses looking to cut expenses and frontload revenue are looking to sell up. I'd predict a sale to Heineken in 2025

 

[Jim Brewster]

Some companies that start off as small businesses with virtue signalling ideals, when they become huge they inevitably seem to end up becoming what they made their mission to be different from. Remember Google used to have the motto "don't be evil"?

 

[MrRook]

That could shrivel up the pool of new employees willing to work for them.

 

[klaus]

It more likely means they're DOWN 24 million on the previous year so see it as a "loss".
Typical reptile behaviour.

It is is a loss in my book (biased accountant).
If you make a loss your're living off the substance, which only goes so far before alarm bells ring.
Works the same for our personal finance.

 

[Rodcx500z]

Could be worse you could be a junior doctor on 15 quid an hour doing 70 hours a week. our country is broken