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Having a Normal OneTM, BrewDog style

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January 21, 2022

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On Monday, Scotland’s leading current affairs investigative program, BBCOne Disclosure, will broadcast a 60min feature about the much-criticized business practices, workplace culture and conditions, and whole, like, “thing” of Scottish craft beer juggernaut BrewDog. Judging by the way the company, and one cofounder in particular, have responded to the lead-up reporting that Disclosure journalists have published this week, the BBC appears to have some serious bombshells to drop on the self-styled “punk” brewery.

Just this morning, for example, The Guardian reported that BrewDog cofounder/CEO/frontman James Watt had apparently tried to intimidate employees who may have spoken to the BBC anonymously, warning in a shareholder forum post that anonymity “can never be guaranteed,” and that “[i]f anyone is in any way concerned by this, it is not too late to withdraw your consent” from appearing in the program.

This is, of course, not normal behavior for the chief executive of an international corporation that is claims to be worth well over $2 billion. But BrewDog is a deeply abnormal company, and after years of emerging from scandal unscathed in Ol’ Donnie Trump “Ah! Well. Nevertheless.”-style, it appears that its habitual line-stepping, counterculture kayfabe, and relentless self-mythology may have finally caught up with it. It’s worth briefly recapping how we got here—after all, the BBC’s crack investigative unit doesn’t routinely focus its efforts on craft breweries, no matter how corny they may be.

Since its founding outside of Aberdeen in 2007, BrewDog has been constantly, publicly, and times even zealously tripping on its own dick. Allegations of workplace discrimination, false advertising, and inappropriate self-dealing—to name just a few—have basically always followed the hotshot “punk” firm, but cofounders Watt and Martin Dickie have (mostly) managed to harness that controversy into crowdfunding lucre and world-beating growth. BrewDog is Europe’s leading craft brewery, and it has expanded to Asia, Australia, and the United States, where its subsidiary is a top-50 player.

I don’t know exactly what finally got the BBC’s attention, but I suspect the Punks with Purpose probably had something to do with it. The group, compromised of current and former BrewDog employees, published an open letter in June 2021 detailing how the company’s rapid growth had created a “toxic” environment where rank-and-file workers were pushed to disregard rules and burn themselves out in service of relentless expansion. The accusations mostly focused on BrewDog’s treatment of workers, which sounds exploitative and gross, but not illegal. But at points, the Punks with Purpose referenced behavior that seemed more plainly against actual laws (emphasis mine):

The only reason BrewDog has become what it is, is that under immense pressure, good people have done bad things to achieve the job set before them, in such a way that benefits only the company. Being told to ignore health and safety guidelines? Don’t. Someone’s demanding you send beer to an event in the USA by bypassing customs? Nope. We know sometimes it feels as though you are part of something bigger, something special and unique – but ask yourself, is that worth the shit you have to deal with?

Shipping beer internationally outside proper regulatory channels? Sounds bad—and a different, much more tangible type of transgression than squishier allegations about workplace abuses, corporate exploitation, and general dickishness. In the course of my reporting for this big VinePair story on BrewDog’s financials, I tried to corroborate the contraband keg-shipping on the record, but couldn’t bring it in and had to move on. Obviously, someone on the Disclosure team worked that same lead and hit paydirt, though. In advance of Monday’s report, the BBC team this week published a column stating that:

The BBC has seen evidence that suggests US treasury officials from the Alcohol and Tobacco Tax and Trade Bureau (TTB) were given false information [about BrewDog’s beer] on at least five occasions during a six-month period, which meant that potentially hundreds of kegs of beer were sent with incorrect labelling - a violation of TTB laws.

The BBC also has a U.S. importer1 on the record accusing BrewDog of “lead[ing] somebody in my company to falsify documents.” This is, to put it mildly, a big deal! False statements to the TTB can be prosecuted as perjury—and the importer, not the producer, would be on the hook. So one way to read this would be that BrewDog lied (or conveniently omitted) information about the beers it wanted to send to the U.S., and set up American importers as fall guys should the heat ever come back on them.

A more charitable way to read it would be simply BrewDog “taking shortcuts” like the well-meaning but occasionally overzealous rebels that they are. That’s very much how James Watt would like you to interpret this latest news! After the BBC contacted the firm, but before the Guardian’s report on alleged employee intimidation, the polarizing cofounder took to LinkedIn (he loves posting on LinkedIn) in an apparent attempt to get ahead of the Disclosure story. In the meandering post, entitled “My Biggest Mistakes - Growing Pains Edition,” Watt concedes “there were oversights in labelling and paperwork” related to the shipments but that the firm paid all its taxes, and didn’t really mean it, besides. Hmm! He also claims that a former TTB official told them the behavior had never put any importers’ licenses at risk, and warns entrepreneurs not to trust reality TV producers. (Like I said: meandering!)

We’ll see what else the BBC has on Monday, when the 60min BrewDog piece airs. (You can watch a very brief trailer here.) But whatever it is, it’s coming at a tough time for BrewDog, which has been working towards an IPO for at least three years. “Could it be sometime in 2022? Maybe. [20]23? Maybe,” Watt told the Telegraph in October 2021.) If this latest scandal further delays the firm’s plans to go public, it’d be bad news for the rank-and-file crowdfunding investors, known as Equity Punks, who have plowed over $100 million into the Scottish brewery over the past decade. As I’ve previously reported, private-equity giant TSG Consumer Partners has a big chunk of BrewDog that will continue to compound at 18%, and anything short of a massive IPO will see Equity Punks both in the U.K. and U.S. get diluted on their shares. Which, of course, would be another BrewDog scandal entirely.

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