Craft beer giant BrewDog has stirred controversy by withdrawing from the voluntary Living Wage scheme, leading to outrage among employees and campaign groups.

The company, known for its commitment to progressive employment practices, has decided to hire new staff at the government's national living wage, a move criticised as abandoning its principles. This decision has sparked debates on the importance of fair wages, corporate responsibility and the impact of financial challenges on ethical commitments.

BrewDog, founded in 2007 by James Watt and Martin Dickie, had been a signatory of the voluntary Living Wage scheme since 2015. This scheme - recommended by the Living Wage Foundation - ensures that employees are paid a rate that reflects the true cost of living. However, in a recent letter to staff, the company announced a departure from this commitment, stating that new hires would now be paid the government's national living wage of £10.42, rising to £11.44 in April.

BrewDog attributed its decision to financial challenges, citing a trading loss of £24 million in 2023, despite a robust performance during the Christmas period. The company emphasised the need for "hard decisions" to maintain financial stability and return to profitability. BrewDog highlighted previous efforts to support its workforce, such as abolishing zero-hours contracts and implementing unique benefits like 'pawternity' leave and paid sabbaticals.

The announcement sparked immediate backlash from employees and campaign groups. Punks with Purpose - a campaign group of current and former employees - accused BrewDog of abandoning its principles, citing the real living wage as a "cornerstone" of the company's identity and stating: "This real-terms pay cut for hard-working front line staff proves there is no principle too dearly held for them to abandon”. The Unite union's hospitality arm called the decision "outrageous" amidst a severe cost of living crisis, stressing the importance of fair wages during challenging times.

BrewDog's decision not to increase pay for bar workers in London - who will continue to earn £11.95 per hour - drew specific criticism. The company's justification for this decision, rooted in financial challenges, was met with scepticism. Critics argue that this move contradicts BrewDog's previous claims that their "crew are their most important resource" and that fair pay is one of their "core beliefs."

BrewDog defended its decision, asserting that despite the challenges in the hospitality sector, staff outside London would receive a 4.95% increase in base pay, and those in London would be paid 4.5% above the National Living Wage. The company highlighted its commitment to doing the best for its people and drew attention to their benefits package that surpasses industry averages.