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The recent collapse of the Scottish beer company BrewDog has had significant financial repercussions, leaving many former employees and creditors without compensation. According to a report from the administrators, AlixPartners, the funds available from BrewDog’s retail arm are insufficient to cover the debts owed to staff and various creditors. When BrewDog was sold in March to the American drinks company Tilray for £33 million, it carried debts exceeding £500 million.
Among the outstanding obligations were approximately £489,000 owed for wages and accrued holiday pay to employees, alongside £2.4 million in unpaid VAT to HM Revenue and Customs. The sale and consequent restructuring of BrewDog led to the closure of 38 pubs across the UK. This shutdown resulted in unpaid bills totaling around £20 million, affecting a diverse range of UK businesses including coffee shops, bakeries, laundry services, legal firms, local councils, and holiday parks. Notably, creditors included prominent organizations such as West Ham United Football Club, Lord’s Cricket Ground, and Manchester University.
The administrative report from AlixPartners highlights that the anticipated revenue generated from selling BrewDog’s assets fell short, and additional unexpected costs were incurred, particularly related to securing closed-down pubs against unauthorized occupation. To manage these challenges, the administrators collaborated with landlords and legal representatives to evict these occupants. Sales of BrewDog’s remaining assets included a 7.8-acre field in Aberdeenshire sold for £41,300, nine vehicles sold for £6,250 in total with others abandoned, and a settlement involving drinks equipment sold to Marylebone Cricket Club for £62,000. Despite these efforts, the administrators state that preferential creditors will not receive repayment due to insufficient funds.
BrewDog’s parent company, BrewDog PLC, is expected to fully settle its £3.66 million tax liability, primarily consisting of VAT and excise duty, with HM Revenue and Customs. The company’s largest creditor was HSBC, to which it owed over £61 million across multiple banking divisions. Though tens of millions have been recouped, a shortfall estimated at £16.8 million remains, which could potentially be reduced through further asset sales in the United States. Meanwhile, private equity firm TSG, holding a 22% stake since 2017, is projected to lose £27.6 million. Additionally, the company owes approximately £190 million to unsecured creditors, who are expected to recover less than one penny per pound owed.
In the wake of the sale, 440 BrewDog employees were made redundant while 736 were transferred to Tilray, which acquired the UK operation and brand. Only eleven BrewDog bars were retained, with the other 38 closing immediately. Staff are able to claim unpaid wages through the UK government’s Insolvency Service, and the administrators have communicated this support information to affected workers. The collapse also wiped out the investments of around 200,000 crowdfunding participants, with AlixPartners confirming earlier this year that shares purchased through BrewDog’s Equity for Punks scheme will yield no returns. Investors typically spent about £500 on shares, though some invested significantly more, in exchange for company stakes, discounts, and perks, all of which are now rendered valueless.
Founded in 2007 by James Watt and Martin Dickie, BrewDog expanded to operate four breweries and around 100 pubs globally at its peak. In response to the collapse, Watt expressed that he was “heartbroken” and offered apologies to both employees and investors. BrewDog’s owner, Tilray, has been contacted for comment regarding the situation
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