In a surprising move, Brewdog, the craft beer giant, has decided to no longer pay its new employees the real living wage, opting for the UK government’s national minimum wage of £11.44 an hour starting April. This decision, falling below the £12 cost of living-based rate, comes as the Aberdeenshire-based firm aims to bounce back from a £24 million operating loss in the previous year.

Former staff members accuse Brewdog of abandoning its principles, highlighting a shift from the company’s voluntary living wage policy established in 2015. The move, deemed “necessary” by Brewdog to ensure financial stability, has triggered discontent among workers and union representatives.

Bryan Simpson, the hospitality organiser of Unite, expressed outrage, stating, “To withdraw the real living wage now, during the most acute cost of living crisis in a generation is outrageous.” Unite is collaborating with Brewdog members to challenge the decision collectively.

The real living wage, independently calculated based on UK living standards, is distinct from the government’s national living wage. Despite Brewdog’s claim that staff over 23 will receive a pay rise, the increase only goes from £10.90 to £11.44, falling short of the cost-of-living-based rate.

Blog posts on Brewdog’s website, boasting its living wage employer status, have mysteriously disappeared, drawing attention from the Punks with Purpose campaign group. The group, formed in response to mistreatment allegations in 2021, criticised Brewdog for a real-terms pay cut, challenging the company’s commitment to fair pay.

While Brewdog’s revenue soared to £321.2 million in 2022-23, it attributed a £24 million operating loss to increased production costs and rising energy bills. Co-founder James Watt apologised to staff in 2022 following allegations of inappropriate behaviour revealed in a BBC documentary.

In response to the backlash, a Brewdog spokesperson emphasised that despite challenges in the hospitality sector, staff outside London will receive a 4.95% increase in base pay, and those in London will be paid 4.5% above the National Living Wage. The company claims its benefits package remains more generous than the industry average.