Beer Instead of Interest Is Brewer’s Answer to Record-Low Yields
A UK brewer is offering investors an alternative to record-low interest rates at home and negative bond yields in the euro area: bottles of its own craft beer.
Innis & Gunn Brewing Co. Ltd., which is based in Edinburgh, is offering beer coupons in place of interest payments on a £3 million ($4.6 million) notes issue. It’s just the latest small company to embrace crowdfunding to raise cash.
The brewer will use the proceeds of the four-year sale to fund the construction of a new site. The notes offer gross annual interest of 7.25 per cent for investments starting at £500. Investors opting to be paid in beer will receive the equivalent of 9 per cent interest a year, the company said.
“The BeerBond is all about inviting our fans and the craft-beer community to invest to help us build this brewery,” founder and Chief Executive Officer Dougal Gunn Sharp said in a press statement.
Britain’s benchmark interest rate is 0.5 per cent and government bonds maturing in July 2019 yield 1.1 per cent.
The deal is similar to a model used by Mexican food chain Chilango, which last year offered “burrito bonds,” giving investors complimentary food on top of fixed-rate payments. Camden Town Brewery in London sought last month to raise as much as £3.5 million by inviting customers to subscribe as little as £10 each in return for equity.
Bloomberg News, edited by ESM