BrewDog is facing anger from its employees after dropping out of the accredited real living wage scheme – hiring new staff on the legal minimum instead and freezing pay for bar staff in London as the company tries to reduce costs amid continuing losses.
In a letter seen by the Guardian, the brewer and bar operator, which is best known for its Punk IPA beer, said new workers were being hired on the legal minimum wage of £10.42 an hour for those aged 23 and over. This is below the independently verified living wage of £10.90 that existing staff get.
Pay for workers outside London will increase to £11.44 an hour from 1 April, in line with the new legal minimum for those aged 21 and over. However, that will be below the new real living wage of £12 an hour that accredited employers pledge to pay from April.
In the capital there will be no increase in the minimum pay offered by BrewDog from April, with the rate for bar staff staying at £11.95 an hour, well below the £13.15 London real living wage being introduced that month. Living costs have increased in the city, with rents soaring last year.
Workers reacted with anger on the group’s internal messaging system, with one saying: “I’ve been at BrewDog long enough to see every benefit that attracted me to the job either binned or completely reduced.
“The effective cutting of our pay again when cost of living is only getting worse, especially in the city that is home to the business’s flagship bar, by a company that prides itself on its ethical ‘underdog’ image and supposed moral values is wildly questionable on both ethical and moral grounds.”
Another member of staff told the Guardian: “Last year there was a staff vote surrounding benefits and what staff want to keep. No 1 was the real living wage. Barely a year later and they’ve turned back on their promise.”
Bryan Simpson, the lead organiser on hospitality at the Unite union, said: “BrewDog has been paying the real living wage since 2015. To withdraw it now, during the most acute cost of living crisis in a generation is outrageous.
“We are already working with our BrewDog members across the country to collectively challenge this awful decision and force the senior management of the company to do the right thing by the workers who have made them millions.”
The Punks with Purpose campaign group of former staff said: “BrewDog management’s decision to revoke a long-standing commitment to the real Living Wage proves that there is no principle too dearly held for them to abandon. ”
The group also criticised the dropping of Brewdog’s scheme in which 50% of a bar’s profits were shared with staff. However, the company says that scheme was changed to a 10% profit share and £1 per hour bonus for good customer service after a staff vote last year.
Katherine Chapman, director of the Living Wage Foundation, said: “We are disappointed that Brewdog have chosen to stop paying the real Living Wage. The independently calculated real Living Wage is the only UK wage rate based on the cost of living and it is voluntarily paid by over 14,000 organisations. Despite tough economic times, it’s been heartening to see record numbers of businesses join the movement.”
BrewDog told workers it was making the “important but necessary … hard decisions” on pay despite a good festive period for the business.
“Even with this strong performance over Christmas, as a wider business there is no hiding from the fact that in 2023 we made a trading loss and despite many efforts in the past 12 months to reduce our spending we still need to find more ways to get this business back to profitability and the financial stability that is needed. Inevitably, this does mean making some hard decisions,” the company wrote.
A spokesperson for BrewDog said: “Despite unprecedented challenges in the hospitality sector – our staff outside London will be getting a 4.95% increase in base pay, and crew currently working in London will be paid 4.5% above the national living wage.
“We have always been fully committed to doing the best we can for our people, and our benefits package is far more generous than the industry average.
“Last year we gave over £350,000 to our bars team via our unique profit share programme. Our team also benefits from a unique bonus scheme which sees all crew members receive an additional £1 an hour for the month for surpassing customer service standards.”
Meanwhile, BrewDog is thought to be considering a stock market flotation.
In 2021, staff accused the company’s chief executive and co-founder, James Watt, of presiding over a “culture of fear” in which workers were mistreated. The company disputed some of the allegations, apologised for others, and in 2022 lost its B Corp status, which offers certifies a company’s ethical commitment to the environment, community and staff.
