Scottish beer giant shipped hundreds of kegs of beer to America which had not been legally approved.
Image source, Getty Images
Scottish beer giant Brewdog sent multiple shipments of beer to the US, in contravention of US federal laws, a BBC investigation has found.
Staff at its Ellon brewery told the BBC they were put under pressure in 2016 and 2017 to ship beer with ingredients that had not been legally approved.
One US-based importer said they had been deceived by Brewdog.
In a social media post on Wednesday, Brewdog CEO James Watt admitted to “taking shortcuts” with the process.
BBC Scotland’s Disclosure programme has been told that staff at the Ellon brewery in Aberdeenshire knew that two of its flagship products, Elvis Juice and Jet Black Heart, contained extracts which would not be approved in the US.
One former worker told the investigation: “The pressure was enormous. ‘Just make it happen’, that was the culture. It was clear to us this was coming from the top – from James [Watt].”
Another said: “We were continually told to ship beer to the USA, despite everyone knowing the beers hadn’t been approved.
“Everyone was worried they’d be [fired] if they didn’t do what was asked.”
The BBC has seen evidence that suggests US treasury officials from the Alcohol and Tobacco Tax and Trade Bureau (TTB) were given false information on at least five occasions during a six-month period, which meant that potentially hundreds of kegs of beer were sent with incorrect labelling – a violation of TTB laws.
All beer imported to the US needs to be declared to the TTB and given an official label before being shipped.
UK breweries provide the details of their beers to a US-based importer, who make the label application on the brewery’s behalf.
If the beer has any unusual ingredients, like flavourings or extracts, these need to be declared so that a special label, referencing the beer’s formula, can be approved before it can be shipped.
Each extract needs to be deemed safe for consumption in the US before an approval is granted, and this process can sometimes take months.
False information provided to the TTB can be prosecuted under US perjury laws.
Brewdog sources have told the BBC that the only way to have shipped Elvis Juice and Jet Black Heart to the US in that period was to not declare the extracts.
Former TTB labelling specialist Battle Martin said: “I think it’s serious. There’s a lot of people out there putting a lot of effort into complying with the regulations.
“There has been a deception here,” he said. “In my view, based on the number of products and based on the number of times this has happened, I think it warrants further investigation, because it shows a pattern.”
The claims are to be broadcast as part of a 60-minute documentary on BBC One Scotland on Monday 24 January at 19:00.
The BBC wrote to Brewdog last week detailing its allegations.
In a LinkedIn post on Wednesday – entitled My Biggest Mistakes As Brewdog CEO – Mr Watt said: “We made some mistakes with the paperwork on the first few shipments [to the US] …all taxes were paid in full, but the paperwork was not always correct.”
“In hindsight, there were oversights … due to the fact we were trying to run a growing business on one side of the Atlantic and start a new business on the other.”
Mr Watt said the company self-reported the issue to the TTB, who told Brewdog there would be no further action taken.
It is not clear if Brewdog self-reported the issue at the time, or after the BBC wrote to them.
The TTB told the BBC that a three-year statute of limitations prevented any enforcement action being taken, and in any case, it would have to have been initiated against the US-based importer, who is legally responsible for the shipments.
Importers face losing their import licence for serious breaches of TTB regulations.
Mr Watt said Brewdog had consulted a lawyer who believed the errors made would not risk an importer’s licence.
Daniel Shelton, who imported one shipment for Brewdog, said he was deceived by the company.
He said: “I was misled. I had every reason to believe that they would tell the truth.
“We believed what we were told and we weren’t told what was actually going on.
“They did lead somebody in my company to falsify documents. And, of course, I’m not happy about that; I don’t respect that, I don’t like it.”
Another importer, Massachusetts-based MHW, told the BBC: “Our focus is to comply with all Federal and State laws and we rely on all our suppliers for whom we import to provide truthful and accurate information as to all the ingredients in their products so we can determine the required Federal compliance processes to be executed.
“Regarding the two products in question, we executed the Federal compliance based on the information provided by the supplier at the time, which we believed to be truthful and accurate.”