Scottish craft beer group BrewDog will begin brewing Punk IPA and other beers in China and will open more bars in the country after forming a joint venture with Budweiser China, the largest international brewer in the market.
The privately owned UK craft beer maker, which has been seeking a fresh start after it postponed a planned initial public offering and faced claims of a toxic culture from staff, said it wanted to tap into a new but growing craft beer market.
It was also shifting its expansion away from its home market of the UK because of the impact of inflation on brewing and hospitality venues there, said BrewDog chief executive James Watt.
“We don’t want to be owned by ‘big beer’ but we do want to become a global beer business,” said Watt. “Most of our focus in putting our capital to work is international. The environment is very challenging in the UK.”
BrewDog’s Punk IPA, Hazy Jane and Elvis Juice will be produced at Bud China’s newly opened Putian craft brewery in Fujian province under the deal, while it aims to open nine more BrewDog-branded bars to add to one already open in Shanghai.
It follows a similar tie-up in 2021 with Japan’s Asahi, under which BrewDog said it had since doubled sales in the country. Bud China is an arm of Bud Apac, the listed Asian brewer majority-owned by the world’s largest brewer AB InBev.
BrewDog previously had a smaller China partnership with distributor Top Shelf and opened a bar in Shanghai in 2020. The new deal aimed to take advantage of an emerging thirst for craft beer in China, said Watt.
The group said production of craft brews in China had reached 6.5mn hectolitres by 2020, though that was dwarfed by more than 341mn hectolitres of beer produced overall in China that year, according to hops supplier BarthHaas. Local craft brewers include Jing-A and Pandabrew.
BrewDog made a pre-tax loss of £9.4mn in 2021, the most recent year for which accounts are available, on net revenues of £219mn.
The brewer, in which private equity firm TSG owns a stake, had planned to list in London in 2020 but postponed the planned IPO as Covid-19 affected hospitality venues and roiled markets.
Watt said the company now had no imminent plans to list but would look to put a timeline in place at the end of 2023.
BrewDog also faced criticism in 2021 when a group of former staff accused the brewer of a “culture of fear”. It made a series of changes in the wake of the allegations, including installing retail heavyweight Allan Leighton as chair, but has also said some of the claims were overblown.
American Dollar Exchange Rate
