BrewDog’s Watt: ‘We need to think of energy crisis as Covid II’

He called on the new Prime Minister, who is reported to be announced today (Monday 5 September), to act now to save businesses in the hospitality sector.

In a social media post titled Reality Bites Part 2, he highlighted the ongoing challenges of rising bills facing the sector.

On LinkedIn, Watt said: “I am deeply passionate about our business and our industry. If I can use the platform I am fortunate enough to have to raise awareness of the genuinely existential threat to our industry, then I will put my neck on the line to do so every single time.

“That said, one comment on the post made a fair criticism – I didn’t offer a solution. So there’s some follow up thoughts on what could be done straightaway to help this genuinely vital industry get through the energy crisis and help protect millions of jobs.”

The pandemic illustrated how the Government can help businesses and consumers alike, according to Watt.

Power of Governments

He added: “Obviously Covid was a huge tragedy, which left many thousands of families with devastating losses.

“But what Covid also showed was the power of Governments to act, which meant unemployment rose by far less than everyone feared.

“I passionately believe in the power of entrepreneurs and business to create great brands and companies like ours, but what we’re facing here is bigger than all of us.

“There is no ‘market’ solution or clever fix if a business sees its energy bills and other costs rise tenfold – more likely than not, it will just die.”

He referenced part of his previous post, where it was revealed the company had “no choice but to close six bars”​ but was also optimistic about the company’s prospects in the future.

Watt said: “To be clear, despite the challenges all businesses face, BrewDog continues to grow strongly in 2022 after strong growth in 2020 and 2021, even though we had to take the tough decision to close six venues, as in the current environment, there was simply no way we could ever make these viable.

“But we’ve also opened the UK’s biggest bar at Waterloo​ with more than 20,000 visitors so far and we have a lot more plans in the pipeline.

Starter for ten

The BrewDog boss outlined five steps the new PM should take to help the sector including reducing business rates, lending cash to businesses and removing VAT for a limited period of time for the trade.

He wrote: “The biggest picture though, is we need to think about this as ‘Covid II’ and act accordingly. Here’s my starter for 10 on what I would do if I were Liz Truss (or Rishi [Sunak]):

1. Reverse the rise in employers’ national insurance contributions introduced in April. The Government wants to protect people’s jobs so why not make it cheaper to keep them in work?

2. Business rates. Cut them in half for a year or better still, make them zero.

3. VAT holiday for hospitality for a year. Everybody will be cutting back on budgets but every little helps. Pubs and bars like ours are vital parts of a community and we need to protect them.

4. State-backed loans. Pubs and bars can borrow from a pot guaranteed by the state and begin repayments say, in 12 months’ time.

5. Extend the household energy cap approach by implementing an energy price cap for businesses as soon as it is practically possible.”

He concluded by saying nay-sayers would claim this was a sector after state money before stating the Government would be paying for this “one way or another”.

Watt added: “For me, it is better spending on supporting business through this nightmare and helping them to manage costs over the longer term than spending the money on unemployment benefits and all the rest of it when tens of thousands of businesses inevitably collapse. Over to you Liz (or Rishi).”