BrewDog USA and Australia next on the block

United Kingdom | The company that once called itself “the world's most valuable craft brewery” with a valuation of USD 2 billion back in 2021, just sold its key assets for GBP 33 million (USD 44 million). Tilray Brands gobbled up BrewDog's UK brewing operations, a distribution centre, brand IP, and eleven “profitable” UK and Ireland bars. What was once the biggest independent brewery in the UK will join a roster of North American craft breweries owned by Tilray, which is negotiating separately to buy BrewDog’s assets in the US and Australia.

Before the sale, the company employed around 1400 people globally. Reportedly, 733 jobs were preserved. But nearly 500 jobs were lost when 38 bars, including eight in London, had to be closed because they were not included in the rescue deal. BrewDog's 18 franchise bars in the UK and elsewhere will continue to operate, though.

Bid by “White Knight” James Watt rejected

That the assets would go for a lark became immediately clear when it was leaked to the press that BrewDog’s co-founder, James Watt, was putting together a bid by offering GBP 10 million of his own money. Allegedly, Mr Watt’s offer for BrewDog (in which he still owned a 22 percent stake) pledged to protect at least 910 jobs.

But one of his backers seemed suspicious, being linked to the controversial private equity firm Modella Capital, which has recently placed a number of retailers into administration, resulting in thousands of job losses. Most likely, some shareholders would have seen his return as detrimental to the brand's reputation.

Tangible assets bought for a song

Tilray are getting plenty of tangible assets for their pocket money. The brewery in Ellon, which came on-stream in 2012, would have been expensive to build in the first place. More than GBP 20 million have since been invested to raise capacity from 200,000 to over 2 million hl, although output is currently only 800,000 hl. Tilray CEO, Irwin Simon said recently that “you couldn't replace the brewery for GBP 100 million today.”

Then there are several BrewDog “Outpost” bars with on-site microbreweries, allowing for experimental, small-batch brewing directly at the venue. BrewDog’s massive bar on Dublin’s south docks is one of those. Luckily, it was taken on by Tilray, as was BrewDog’s flagship bar in London Waterloo, dubbed “enormo-pub” when it opened in 2022.

The Waterloo bar, a redevelopment of the former Eurostar terminal, does not just sling pints, it additionally features co-working spaces and pods, a café, a cocktail bar, duckpin bowling alleys, a podcast studio, some meeting rooms and a slide. While the investment for the 2700 sqm bar was not disclosed, the site must have cost upwards of USD 5.7 million – the sum potential BrewDog franchisees were expected to splash out on a large bar. In all probability, it cost nearer to USD 17 million, which BrewDog sank into its similarly-sized, custom-built Las Vegas bar (2800 sqm) in 2022.

Once the US and Australian licensing is complete, Tilray will also buy BrewDog USA and BrewDog Australia. These deals are likely to close within 30 days. Expect Tilray to again pick the best assets for a steal.

Ohio brewery with spare capacity

In 2017, BrewDog took on the US market with the launch of its BrewDog Ohio brewery, followed by the opening (and later closing) of several bars and a hotel. The initial investment came to USD 30 million, reports say. The brewery in Ohio, which is sporting a 170 barrel brewhouse, ran at just 30 percent capacity in 2024 and has been available for contract brewing. Presently, the US unit has USD 20 million in annual sales, with half of that figure coming from its big bars in Las Vegas, Cleveland and Columbus. However, the US branch recorded a loss of GBP 6.7 million (USD 9 million) in 2024 and had to slash its distribution from 33 states to 14.

In Australia, BrewDog spent AUD 30 million (USD 22 million) to build a brewery and taproom in Brisbane in 2019, with a projected production of 100,000 hl beer annually. Today, it sports a total of five bars, three of which are independently operated.

Observers say that BrewDog is a cautionary tale: rapid expansion outpaced financial discipline, and preference shareholders got first call on whatever was left. Tilray obtains a globally recognized craft beer brand for essentially nothing. The 220,000 people who funded the brand's growth receive nothing.

Selling craft beer is hard. Running 100 pubs is harder. Doing both while haemorrhaging cash with a PE firm breathing down your neck is nearly impossible. BrewDog found that out the hard way.