Brewdog workers owed wages to receive nothing, administrators report

HSBC faces £16.8m shortfall; TSG set to lose £27.6m

Administrators AlixPartners, in a report on Brewdog’s UK retail arm dated Friday, said there are “insufficient funds” for preferential creditors — those owed wages and certain tax claims — to be repaid. The Aberdeenshire-based brewer carried more than £500m of debts when it was sold in March to US drinks firm Tilray Brands in a £33m rescue deal.

The administrators distinguished the retail arm’s position from that of parent company BrewDog PLC, which remains in operation and is still expected to pay its preferential creditor, HMRC, in full for £3.66m owed — mainly VAT and excise duty.

AlixPartners attributed the shortfall to lower-than-expected funds from asset sales and increased costs during the administration period. The administrators cited unanticipated expenses around the security of closed Brewdog pubs after “unauthorised occupiers” gained access, and said they had worked with landlords and lawyers to remove them.

Asset disposals yielded small returns. A 7.8-acre field in Potterton, Aberdeenshire, sold to a local farmer for £41,300. Nine Brewdog vehicles, described by the administrators as “of old age and varying roadworthiness,” produced just £6,250 from a single sale; the remainder were abandoned. A settlement involving drinks equipment sold to Marylebone Cricket Club, which owns Lord’s, generated £62,000.

Among the unsecured creditors — owed approximately £190m in aggregate — financial services group HSBC was the largest. It is owed more than £61m across various banking arms. HSBC has recovered tens of millions of pounds but still faces an estimated £16.8m shortfall, though AlixPartners noted that figure could be reduced through asset sales in the United States. Private equity backer TSG Consumer Partners, which took a 22% stake in Brewdog in 2017, is set to lose £27.6m. Unsecured creditors are expected to receive less than a penny in the pound of what they are owed.

The list of creditors stretches from sports institutions to local traders. AlixPartners said creditors included West Ham United FC, Lord’s Cricket Ground and the University of Manchester, alongside coffee shops, bakeries, laundry services, lawyers, councils and holiday parks. Former staff can apply for unpaid wages through the UK government’s Insolvency Service; the administrators said they had provided workers with information on the support.

The administration followed Tilray’s March acquisition of Brewdog’s brand and UK operation. Eleven bars were retained as part of the deal; 38 closed immediately, producing 440 redundancies and the transfer of 736 employees to Tilray.

About 200,000 investors in Brewdog’s Equity for Punks crowdfunding scheme had their holdings declared to have “no value” by the administrators. Investors typically paid about £500 for shares in exchange for a stake in the company, discounts and perks, though others invested much larger sums. Brewdog was founded in 2007 by James Watt and Martin Dickie and at its peak operated four breweries and about 100 pubs worldwide.

Watt said in March that he was “heartbroken” after the collapse and apologised to staff and investors. Tilray has been approached for comment.