Redruth's problems revolve around a squeeze on cash flow, mainly caused by competition in its main business of canning and bottling beers for other brewers to sell in the take-home trade.
Management, led by Paul Smith and Tony Warmby, paid pounds 700,000 for what they described as a dream buy in 1991. Devenish reputedly spent pounds 7m modernising the 200-year-old brewery before selling out to a buyout team backed by a Barclays Bank loan and a regional grant from the Department of Trade and Industry.
Most of the investment by Devenish, which was taken over by Greenalls last year, was in canning and packaging lines to handle beers from other regional brewers including Wadworth, Brakspear, Fuller Smith & Turner, Gales and Eldridge Pope. Redruth's main brand is John Davey bitter and it also brews Cornish Original for Whitbread.
Profit margins on canned beers have been eroded by supermarket groups putting pressure on suppliers, by bigger brewers fighting for market share, through the introduction of draught-flow systems in canned beers and by cheap imports from across the Channel.
Despite the problems, Ian Walker, one of the receivers from Pannell, believes the brewery has a future. 'We had a good look at the brewery when we went in and we took the decision that it was salvageable,' he said. 'We are actively seeking a buyer.'
Talks were already being held with three prospective buyers, which included one from overseas, before the brewery's directors called for receivers to be appointed. All are said to be still interested, and Mr Walker added that more than 90 other parties had made inquiries since the receivers took control last week.