No-deal Brexit is a doomsday scenario for BrewDog

United Kingdom | As Mrs May’s Brexit agreement was crushed in the Commons on 15 January 2019, many, including Scottish brewer BrewDog, are worrying that the UK could quit the EU on 29 March 219 with no transition plan in place.

The UK’s largest craft brewer sells more than a third of its volume brewed in Scotland, in mainland Europe. It fears that the sudden imposition of tariffs and duties, not to mention customs delays, could spur supermarkets and bars on the continent to reconsider whether to carry its products.

“So much of the beer we make here ends up in France and Germany and Spain and Italy, so for us that would be doomsday,” BrewDog’s cofounder James Watt told Bloomberg on 24 January 2019. “I might just go live in America.”

According to Bloomberg, Mr Watt and his management team have been weighing several plans for dealing with a hard Brexit: they might ask their European partners to temporarily share brewing capacity, or build a brewery in an EU member country. Failing that, they could ship beer from BrewDog’s two-year-old US brewery in Columbus, Ohio.

The turmoil around Brexit is hitting as BrewDog is expanding its global reach. It is currently building a brewery in Brisbane, Australia, and there are plans to construct one in China. The company is opening US bars in Indianapolis and Cincinnati, and is eyeing locations in Shanghai and Kuala Lumpur. It intends to launch its own Scotch whisky later this year.

An early user of crowdfunding, BrewDog has so far raised GBP 67 million (USD 88 million) from almost 100,000 “Equity Punks” and successfully circumvented big pub companies by opening its own bars.

BrewDog’s strong branding was a reason why TSG Consumer Partners, a San Francisco-based private equity firm, paid USD 128 million for a 23 percent stake in the company in December 2017.

The company is valued at USD 2.2 billion. Its revenue rose 60 percent in 2018 to GBP 179 million (USD 235 million). In the UK alone BrewDog has created more than 1,200 jobs.