ICSM Hospitality Insolvency News: troubled brewer and publican BrewDog sees collapse in beer sales after series of media gaffs and bad publicity

By Harry Mottram: there’s an old saying in marketing, ‘all publicity is good publicity’ and for many years that was true for BrewDog – until the firm’s marketers ran ads mocking the homeless in 2015. At the time the Scottish brewer and owner of a string of pubs both here and abroad had been on an upward curve of growth beginning as friends James Watt and Martin Dickie created their first beer in 2007 before opening a pub in Aberdeen two years later. Since then, the alternative pub chain grew into an international chain while creating more ales and seeing them sold through hundreds of pubs.

The bad publicity began in 2015 with a marketing strategy that had always pushed the envelope criticised for bad taste as it mocked the homeless amongst other targets. Poor staffing policies were cited in a TV documentary where sexual harassment was rife while the extravagant lifestyle of the owners contrasted with the working conditions of the workforce.

This year the firm saw its beer removed from 1,850 pubs in the UK ten of their pubs closed and rumours that the writing was on the wall. In the last year the firm has had three CEOs including James Watt resigning last December following a string of sexual harassment allegations and his ill-judged suggestion of delaying his wedding for tax reasons that was heavily criticised since he’s worth more than Ed Sheeran or Lord Sainsbury.

Ian Carrotte of ICSM said it showed a lack of judgement and suggested it came close to his ‘Ratner moment’. Readers of a certain age may well recall how Ratners Jewellery chain collapsed after the CEO called their stock ‘crap’ – essentially mocking his customers. He said: “In business, especially when your customers are the general public - it is best to steer clear of controversy as inevitably if you slag off women or the homeless or even the Government – some of your customer base will be insulted.”

There is no evidence that BrewDog is in danger of collapse but if the bad behaviour was to continue and more pubs such as Wetherspoons cancelled their orders then there are plenty of other Brewers who could take their place.

Ian Carrotte said that once a firm is on a slippery slope having messed up it can be difficult to reverse the decline. He added if the brewer sticks to what they do best - making a decent pint - then things should improve - with luck.

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