Cains Of Liverpool

Nine years and three months after Cain's first applied to join the Independent Family Brewers of Britain the Liverpool brewer has at last been admitted to membership. Why has it taken so long?

Cain's is run and owned by the Dusanj brothers, Ajmail and Sudarghara (right). In 2002 they bought the brewery that was founded by Robert Cain in 1850, became Higson's, was taken over first by Boddingtons and then by Whitbread, who closed the site. It was reopened by Brewery Group Denmark and when the Danes' business model failed the Dusanj brothers, who had previously run a soft drinks company, took it over.

The brothers saved the only major beer maker left on Merseyside. That fact alone should have held in them in good standing when they applied to join the IFBB in 2002. They ticked all the boxes required for membership: Cain's was family-owned, it had tied houses and it made and sold cask beer.

The brothers were interviewed by two executives of the IFBB, Anthony Fuller of Fuller's and Paul Baker of Thwaites, and were then informed their application had been rejected. When the brothers asked why, they were told the IFFB had added a new rule of membership: namely, that a company had to be family-run for 10 years before it could join. In other words, the rule had been added after the Dusanjs applied for membership and it was designed specifically to keep them out.

At long last, the wrong inflicted on Cain's has been righted. The IFBB today is a different body to the one that rejected the Dusanjs. The brothers were visited by the current chairman, Paul Wells of Wells & Young's, who asked them if they were still keen to join and when they replied in the affirmative were told they were welcome. There was no mention of a "10-year rule" and they officially joined the organisation on 12 October.

"Paul Wells didn't discuss the past," Sudarghara Dusanj says. "We talked about tied pubs and cask beer and the way forward for family brewers. The IFBB is a remarkable organisation - some of the breweries have been family-run for seven generations and Paul is very proud of that family tradition. All the brewers I know who are members of the IFBB are good, genuine people."

So what went wrong 10 years ago? Dusanj believes it had more to do with class than race prejudice. The brothers were born in Kent but their father, Surinder Dusanj, is a Sikh from the Punjab. "He arrived at Heathrow in February 1962 and he didn't understand distances in England," Sudarghara Dusanj says, "so he caught a cab to Coventry where his aunt lived."

The family settled in Chatham in Kent. Surinder Dusanj worked for GKN in Stroud but in his spare time opened a fish and chip shop. He left GKN in 1986 to concentrate on the fish and chips business where he was joined by Ajmail and Sudarghara when they left school. In total the family bought and owned 10 shops and sold some of them to relatives.

In 1992, the brothers moved to Brierley Hill in the Black Country where they ran a soft drinks company, Gardner Shaw. "We sold baby splits and then moved into kegs," Sudarghara Dusanj says. "We delivered to the free trade, hotels and Indian restaurants but we noticed the tremendous loyalty in the Black Country to Banks's, Bathams and Holdens. That inspired us to buy Cain's when it came on the market. People in Liverpool were proud of their brewery and we thought it would be a good place to invest."

They paid 3.4m for the site and 10 pubs and set about restructuring the business. "The Danish group had focused on selling Faxe, a beer from Denmark," Sudaghara Dusanj, now Cain's chief executive, says. "We wanted to sell Liverpool beers in Liverpool. We had Mild, Bitter and FA premium bitter and we added a proper lager and developed a strong seasonal list of 12 beers a year. We set out to attract younger drinkers, including women: we wanted to make beer the new wine."

Cain's is a big brewery with an annual capacity of 550,000 barrels a year. To make the business profitable, the brothers used their knowledge and success of the retail trade to sell beer to the free trade, supermarkets and shops, and to take on important contracts to can and keg beer for other brewers. Cain's own beers - including the award-winning and enormously successful Raisin Beer - became national brands in cask, can and keg. The annual turnover was running at 30m. Then the blow fell: a No Entry sign at IFBB head office. Sudarghara Dusanj believes the then leaders of the family brewers weren't used to dealing with working-class people who'd run fish and chip shops.

When Anthony Fuller and Paul Baker came to interview the brothers, the four ended with a beer in the brewery tap. "They asked Ajmail and me if we had any hobbies - for example did we go shooting at the weekend? We said we'd never shot anything in our lives and I'm convinced it was our failure to 'go shootin', more than running fish and chip shops, that stopped us joining the IFBB."

Five years later, Cain's had bigger problems than membership of the IFBB. In May 2007, the company made a reverse takeover of the Honeycombe Leisure group, which gave the brothers and their family control of 109 outlets, a stock market listing and a major base in North-west England. The Dusanj family put in 3m but Honeycombe, which had suffered from years of under-investment, had debts of 26m. The deal was backed by Cain's bank, the Bank of Scotland, and Sudarghara Dusanj believes the new firm, Cain's Beer Company, would have thrived but for unseen circumstances: the negative impact of the smoking ban, one of the worst summers in living memory, and then the credit crunch. "Within 12 months, the world had changed," he says. "But for these factors, the bank would have taken a different approach but the banks got things badly wrong."

Cain's went into administration in 2008 when the bank refused to fund a tax bill of 5m and HM Revenue and Customs started legal proceedings. PriceWaterhouseCoopers was appointed as administrator and sacked all members of the Dusanj family working for Cain's Beer Company. It was a terrible blow for the brothers, who had worked full-time since they left school aged 16.

"I sat at home and watched the Beijing Olympics," Sudaghara Dusanj says. "I watched athletes falling down and getting back up. That was an inspiration. Then after six weeks PriceWaterhouseCoopers phoned and invited us to buy back the business."

That business was much reduced: the brewery and seven pubs. Many of the Honeycombe outlets had gone to leaseholders and Punch Taverns had cherry picked other pubs. The family had to raise 100,000 for the leasehold side of the business.

Was it back to square one? Sudaghara Dusanj laughs. "It was minus square one. No supplier would give us credit. We had higher costs for malt, hops and cans. We had no contracts and nobody would give us credit."

With grim determination, the brothers worked seven days a week to rebuild the business, now known as the Robert Cain Brewery. They have re-established their canning and kegging for other brewers and are supplying their own beer to the free trade, wholesalers, supermarkets, Enterprise Inns, Mitchells & Butlers and Punch. They export beer to the United States, China, Russia, Italy, Denmark and Switzerland and are in discussion with importers in India and Australia.

"We have fewer borrowing and no leverage deals," Sudaghara Dusanj says. "We're a smaller business with a good team, good brands and we've invested heavily in new plant. Our own brands account for 25-30% of the business.

"We lost 1.8m the first year of the new company, 900,000 the second year but we'll break even this year with a turnover of 34m. We'll be back in profit next year."

And now, nine years and three months later, the Dusanj brothers have at last been allowed to join the IFBB. And they still don't go shooting at weekends.