Scottish craft beer group BrewDog will start 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 market’s largest international brewer.
The privately-owned British craft brewer, which has been seeking a fresh start after delaying a planned initial public offering and facing demands for a toxic culture from staff, says it wants to tap into the nascent but growing craft beer market.
It is also moving expansion away from its home market of England due to the impact of inflation on the brewing and hospitality scene there, said BrewDog chief executive James Watt.
“We don’t want to be owned by ‘big beer’ but we want to be a global beer business,” Watt said. “Most of our focus in deploying our capital is international. The environment is very challenging in the UK.
BrewDog’s Punk IPA, Hazy Jane and Elvis Juice will be produced at China’s newly opened Putian Bud brewery in Fujian province under the deal, while it aims to open nine more BrewDog-branded bars to add to the one already opened in Shanghai.
It follows a similar tie-up in 2021 with Japan’s Asahi, where BrewDog says it has since doubled sales in the country. Bud China is an arm of Bud Apac, an Asian beer company majority owned by the world’s largest brewer AB InBev.
BrewDog previously had a smaller China partnership with distributor Top Shelf and is opening a bar in Shanghai in 2020. The new deal aims to take advantage of the growing thirst for craft beer in China, Watt said.
The group said craft beer production in China had reached 6.5 million hectoliters by 2020, although more than 341 million hectoliters of beer was produced in China that year, according to hops supplier BarthHaas. Local breweries include Jing-A and Pandabrew.
BrewDog made pre-tax profits of £9.4m in 2021, the latest year for which accounts are available, with a net profit of £219m
Beer, in which private equity firm TSG has a stake, had planned to list in London in 2020 but postponed the planned IPO due to the hospitality space and markets affected by Covid-19.
Watt said the company currently has no plans to list but would make a timeline of late 2023.
BrewDog also faced criticism in 2021 when a group of former staff accused the brewer of a “culture of fear”. It made some changes in the wake of the allegations, including installing retail heavyweight Allan Leighton as chair, but it has also said some of the claims were overblown.