Brewdog CEO comes under fire after scrapping living wage plans

BrewDog, the UK’s largest craft beer brewer, has recently announced a significant change in its wage policy, sparking controversy among its employees and industry observers.

The company has decided to abandon its commitment to the real living wage, opting instead to pay new employees the government’s national living wage of £10.42 an hour.

This decision marks a departure from BrewDog’s previous commitment to pay all workers the voluntary real living wage of £12 an hour.

The company’s decision has been met with backlash from employees and unions alike. Critics argue that the move is a betrayal of the company’s ethical commitments and a blow to its workers, particularly in light of the current cost of living crisis.

However, BrewDog has defended its decision, stating that the changes were necessary to return the company to profitability after a trading loss in 2023.

“It is important to note that nobody’s wages are going down and what we announced is actually a pay increase most of our people,” CEO James Watts said in a statement.

“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.”

Best of a bad situation?

Watt has been at the center of the brewer’s decision controversy. While some have criticized his decision as a step back from the company’s ethical commitments, others argue that it was a necessary move to ensure the company’s financial stability and maintain employment levels.

In a statement, Watt noted the company had increased the wages of our UK bar teams by a huge 20.4% since March 2022. “This is well ahead of most industries and almost all of our competitors,” he said.

“With the Real Living Wage increasing by an additional 10% in April 2024 we could not implement this on top of all the other amazing things we do for our people whilst still offering fantastic value for our customers at a time where they have less disposable income to spend.”

The decision to abandon the real living wage commitment raises important questions about the balance between profitability and employee welfare.

BrewDog Profit share. In the first ten months of 2023, the brewer shared £350,000 with it’s bar teams and this will increase to £500,000 when the fourth quarter of last year is included. The business also operates a customer service incentive where everyone working in a bar can earn an extra £1 per hour for the entire month simply by passing their mystery shop.

“By having the additional payments linked to customer service and performance (through profit share and our customer service incentives) we can invest in our people in a way that delivers great service for our customers and helps build a solid and profitable business that benefits all of our shareholders,” Watts said.

While BrewDog’s decision may help to stabilize the company’s financial situation in the short term, it could potentially impact employee morale and the company’s reputation in the long term.

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