James Watt, co-founder and CEO of BrewDog, a multinational brewery and pub chain, admitted on LinkedIn that he made a "£500,000 mistake" in promoting the company's Willy Wonka-inspired competition in late 2020.
The competition gave consumers a chance to find one of 50 gold beer cans hiding in cases of BrewDog beer. Winners could keep the can and would also receive thousands of dollars' worth of shares in the company. The problem? Several promotional tweets authored by Watt claimed that the beer cans were "solid gold," when, in reality, they were made mostly of brass and only plated with gold.
At least 25 competition winners complained to the Advertising Standards Authority (ASA), the UK's self-regulatory organization, after discovering this reality. The ASA upheld the complaints and concluded that the ads in question were misleading. BrewDog admitted as much, with Watt explaining that he got "carried away" in the excitement of the campaign and "misunderstood the process" of how the cans were made.
To make things right, and after a "media storm" that made BrewDog look "dishonest and disingenuous," Watt reached out to all 50 winners and offered to compensate them in cash if they were "unhappy with their prize." "Furthermore," he said, "I promised to fund this myself so the business did not have to suffer financially from my mistake." According to Watt, the "expensive mistake" cost him £470,000 out of his own pocket.
This isn't the first misleading claim by BrewDog in recent history. Just last month, the ASA banned an ad over a "tongue-in-cheek" claim that the company's fruit-flavored beers constitute "one of your five a day," a humorous nod to government guidelines that recommend five servings of fruit and vegetables a day.
This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.