Cain’s: the final chapter?Posted: May 14, 2013
Back in December 2007 I submitted the manuscript of my book Cains: The Story of Liverpool in a Pint, to my publisher, Liverpool University Press. The book is a history of Robert Cain and his brewery going back to the eighteenth century, and the plan was to publish it in the autumn of 2008, as Liverpool basked in the warm glow left over from its Capital of Culture summer. It would hit the bookshop shelves just as the Christmas market began to gather momentum.
Of course it didn’t work out that way. On August 7, 2008, after several months of speculation, administrators were called in to manage the Cain’s brewing company, which had collapsed under the weight of its debts and unpaid taxes. Taking over the loss-making Honeycombe Leisure pub chain a year earlier was a near-fatal mistake for the brewery, but it also meant I had to rewrite the final chapter of my book. And I had to do so in September and October of 2008, which was when the book should have been published. You can read my revised final chapter here in its unedited form.
Looking at it now, the takeover of Honeycombe was reckless and foolish, but it is easy to forget the difference in economic climate between 2007 and 2008. Here is the statement made by Bank of Scotland in May 2007, after the deal was struck to take over Honeycombe, when the bank had agreed to lend Cain’s £40 million to support the business:
“Bank of Scotland is delighted to be supporting a highly reputable and well-known local business with national ambitions to make its mark with the UK brewery sector.
Throughout the course of our discussions with Cains, we’ve been consistently impressed by the strong management demonstrated by the Dusanj brothers. Their entrepreneurial aspirations for the business closely reflect Bank of Scotland’s own commitment to funding ambitious and fast-growing companies throughout the UK.”
Of course Bank of Scotland itself had to be rescued and was taken over by Lloyds, so its pronouncements on good business should not be taken too seriously, but this statement gives a flavour of the gung-ho economic climate of the time. Some businesses got away with it; others didn’t.
In the month or so following the company going into administration there was talk of a takeover from another brewer, Marston’s being the favourite, and of the possibility of total collapse. In the end the Dusanj brothers managed to extricate themselves and the brewery from the mess by a combination of weapons-grade forward planning (the brewery turned out not to have been owned by the collapsed company but by a Dusanj family trust) and pre-pack administration rules, leaving creditors with nothing.
A new company was formed to take over where the previous one left off, but this time, rather than focus on a large pub estate, the company supported itself with a push into supplying supermarkets, and an ambitious move into exports which saw Cain’s beers on sale in the United States, and more recently Asia. The quality of the beer at home in Liverpool, most pundits agree, took a dive.
Unfortunately, neither of those outlets seems to have been enough. The squeeze on consumer incomes, high commodity prices, and a depressed economy made already tight margins on supermarket beer unsustainable. As we discovered this week, with production at the brewery stopped, Cain’s was not competitive as a budget brewer. Nor was it producing beer to high enough quality, or of sufficient interest, for the booming ‘craft’ market. The consequence of such failure, of course, is a human one, counted in the misery of unemployment in a city with few enough jobs as it is.
Yet despite all the mis-steps, misinformation and marketing flim-flam, despite the effect all this had on my own livelihood, I still have some sympathy for the Dusanjs. Over the past half century many brewers and managers have tried to make Robert Cain’s brewery profitable, with varying degrees of success. The fact that it was in production until only a week or so ago is a testament to the effort put in against the odds by the current owners. Looking back over the many articles about Cains over the past decade one thing becomes clear: the Dusanj brothers wanted to build a regional brewery to compete with the likes of Thwaites, J.W Lees, and Moorhouses. That they have failed in the worst economic conditions for 100 years should not be held against them. I will no doubt take some flak for that view, but there it is. Of course what most object to, myself included, is the ruthless and seemingly unprincipled manner in which they have been seen to do business, particularly in 2008. Few people other than Lord Young openly admire callousness in business, but as the example of Brewdog shows, they don’t mind so much when it comes wrapped in a squirrel and giggling into its overpriced pint. Perhaps the Dusanj brothers’ mistake is not that they have hidden their private ambitions, but that their motives have been all too much in evidence. For example, until 2011 the Independent Family Brewers of Britain, at least, thought they were just not the right sort.
The story of the historic brewery takes up most of my book, but is naturally overshadowed by the drama of the Dusanj-era final chapter. I have no intention of returning to the subject in print–the Robert Cain period is far more interesting to me–but the new plan for the site is to make a market-style ‘brewery village’, a retail and residential complex which also includes a small-scale ‘craft’ brewery. Whether the Dusanj brothers will be able to raise the £50 million required to do this is debatable. I still think there is a role here for a bigger brewer, either as owner of the Cain’s brand, or perhaps even taking over the brewery itself. What seems more likely is that property speculators will move in and, after more than 200 years, brewing on the site will cease for good. After speaking with the Dusanj brothers during the crisis of 2008 I got the feeling they would have sold up and left then if they could. I think that time could well be soon.
Update, May 16, 2013: The Liverpool Daily Post is reporting that brewing has been declared ‘not viable or sustainable’ at Cain’s by the board. The workers are being treated very badly too. According to the article Sudarghara Dusanj has refused to pay redundancy compensation or back pay, instead referring now former employees to the Redundancy Payment Service. That is usually what happens when a company is insolvent. If that isn’t the case, or there is another Dusanj company waiting to step in, then it is a cynical move to sidestep responsibilities and pass them on to the taxpayer.
Please note. Back in 2008 quite a few comments about the Dusanj brothers on this blog had to be edited or deleted because they were libellous. If you want to comment be nice and be careful.