<div id="readability-page-1"><div><div><div><div><p>It took British craft beers into the global market. It relied on small, committed, private investors to fuel its growth. And it was shaking up the cosy oligopoly of big beer. Rewind just a few years and BrewDog was one of the smartest companies to emerge from Britain over the last 20 years.</p><p>Now that it has been put up for sale, it would be easy to blame the Chancellor and the punishing tax rises that have hammered pubs and breweries for its downfall.</p><p>Yet in reality, BrewDog was the author of its own demise. From a toxic work culture to greedy, short-term financial engineering, it ruined itself – and sadly another promising British company has been unable to turn itself into a global business.</p><p>On the surface, BrewDog is yet another victim of Rachel Reeves’s relentless determination to impose as many taxes as she can think of on longer-suffering pubs, as well as a stagnant economy where people are struggling to afford the price of a pint, never mind a meal out.</p><p>As it put itself up for sale, the brewing and pub chain blamed a “challenging economic climate”, as well as the “headwinds” created by extra taxes on alcohol and pubs for the mess it finds itself in.</p><p>After making mounting losses for the last few years, including an alarming £37m on sales of £357m last year, the company has now appointed the restructuring experts Alix Partners to help find a solution for the business.</p><p>It looks almost certain to be sold off, either as a whole or in pieces. One of the brightest British start-ups of the last two decades will either disappear completely or vanish into one of the bland mega-brewers.</p><p>That is a huge disappointment. Founded in 2007 by James Watt and Martin Dickie, BrewDog was, for the first decade at least, an example of British entrepreneurship at its finest. It rode the boom in craft beers, generated plenty of free coverage for itself through clever social media and used crowdfunding to finance its expansion instead of the banks or the stock market.</p><p>It was brash, and some of the stunts might have been a little cringe-making, yet it was also fresh, innovative and full of energy. Beers such as Elvis Juice and Punk IPA were something different.</p><p>Its more enthusiastic backers, and indeed many of the so-called “equity punks” who put money into the business, might have hoped it would emerge as a challenger to the likes of AB InBev, Heineken and Carlsberg.</p><p>Right now, that all looks as if it is about to turn to dust. Watt has already left the company, it is losing money and its private equity shareholder, TSG Capital, has effectively demanded that it be sold off.</p></div></div><div><div><p>There were two big problems. Allegations of a toxic work culture, with the staff complaining about punishing hours and rampant sexism were made against the business.</p><p>In the wake of that, both Watt and his co-founder left the company. That mattered. If you are going to be the savvy entrepreneurial insurgent taking on the establishment, then you need to keep your staff and the customers on board. They will always be the most loyal advocates of your brand.</p><p>Whatever the rights or wrongs of the allegations made against Watts and the rest of the management, the rows trashed the brand. BrewDog started to turn into just another faceless corporate brewer.</p><p>Even more serious was the nature of the deal signed with TSG. The firm injected £213m into the business back in 2017 in return for a 21pc stake.</p><p>In a highly unusual deal, the firm insisted on a clause guaranteeing an 18pc compounded rate of return on its investment. It was, to put it politely, expensive money even by the standards of private equity.</p><p>Sure, it turned the founders into multimillionaires and avoided a stock market float, but eventually it led to the company accumulating debts of more than £800m, an almost impossible burden for it to carry in the climate when its core British market has stagnated.</p><p>The “equity punks”, who surely deserved a lot better, may well be hung out to dry if the business is sold off, and so will the staff if pubs and breweries have to be closed or slimmed down.</p></div></div><div><div><p>A company that was meant to be doing things differently has ended up, like so many promising start-ups before it, as a victim of too much hype and over-complicated financial engineering.</p><p>Watts meanwhile, is busily turning himself into an entrepreneurship guru with plans for his own Dragon’s Den-style reality TV show. In terms of energy, verve and chutzpah, he has plenty to teach people, and, in fairness, those are all important qualities when founding a company.</p><p>But you also need a long-term vision and a determination to play the long game. In the end, BrewDog was a victim of the greed of both the private equity industry and the founders, who seemed more interested in getting rich quickly than patiently building a major business.</p><p>Britain has a rich heritage in brewing. The craft brewers were reinventing that for a new century. BrewDog was the brightest star to emerge from that boom.</p><p>For a brief moment, it had the opportunity to turn itself into a major new global brand. If there is a lesson from its likely demise, it is that as a country, we still have the ability to produce great entrepreneurs. Yet as so often, it has proved impossible to transform that into lasting success – and until that starts to change, the UK will not generate nearly as many major new companies as it should.</p></div></div></div></div></div>

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EATZ

<p>BrewDog, once a leading British craft beer company, is facing a potential sale due to mounting losses and a toxic work culture. Founded in 2007, it thrived on innovation and crowdfunding but has struggled with an £800m debt burden and allegations of sexism. The company blames a challenging economic climate and increased taxes for its troubles. Co-founders James Watt and Martin Dickie have left, and BrewDog's future now hangs in the balance, risking the loss of its unique brand identity and loyal supporters.</p>

BrewDog is the author of its own demise