Still brewing in a dry land: Pakistan's only beer and whisky firm

After 150 years, business is booming at Pakistan's only beer and whisky firm. Andrew Buncombe finds out why

On the walls of the historic Murree brewery, Pakistan's sole producer of beer, hangs a slogan that its owners would wish upon the entire country. "Eat, drink and be Murree," puns the poster, seemingly produced in the 1970s.

Understandably, making beer and whiskey in a Muslim country, where 97 per cent of the population is officially banned from enjoying your products, has never been an easy business. Non-Muslims are exempt from the ban, but even for them obtaining a drink can be complicated: some five-star hotels require foreigners to affirm in writing that they are non-Muslims and will be responsible for anything that happens when they are under the influence before they can order a drink.

And amid the upsurge of militant violence of the last two years that has seen the Taliban attacking targets across the country, setting fire to girls' schools and even banning the sale of videos and DVDs, common sense might suggest that the fortunes of this establishment, which celebrates its 150th anniversary next year, might be on the wane. Yet the opposite is happening: sales are booming – embarrassingly so.

"Sales are good," said Isphanyar Bhandara, the brewery's 36-year-old chief executive, "but we don't want to shout about it because that also brings negative publicity and criticism, because this is a Muslim country – and yet sales are growing."

Pervaded by a rich smell of fermenting yeast and equipped with Victorian maturing cellars, the brewery is located in the heart of the military cantonment area of Rawalpindi, the garrison city where 30 people died in a suicide bomb attack earlier this week. The scenes within the thick stone walls are reminiscent of a British brewery of the remote past. Located opposite the residence of the Chief of the Army Staff, the brewery says it has never received a direct threat from the militants.

Metaphorically speaking , the Murree brewery sits on one of the major fault lines of Pakistan's often contradictory society. While Muslims have been banned from buying or drinking alcohol since 1977, few private social gatherings among the country's political or business élite take place without the lubrication of liquor. A well-established network of bootleggers dealing in both locally produced and smuggled alcohol ensures that, while bars do not exist except for a couple of gloomy premises in five-star hotels, a drink in a private home is never far away.

For an institution such as the brewery, this two-faced attitude towards alcohol has meant several things. Firstly, while Christians, Hindus, Zoroastrians and other non-Muslims officially constitute its customers, there is a private acknowledgement that the overwhelming majority of drinkers are Muslims who work their way through the easily exploited permit system. Non-Muslims and foreigners can acquire an official permit that allows them to buy 30 bottles of beer or a quart of spirits every month. Reports suggest that such permits are easy both to copy and to obtain fraudulently.

At the same time, the brewery and distillery have to operate within a set of cramping rules. They are not allowed to advertise their products, for instance, and they have yet to be given permission to export them. The Islamic Ideology Council of Pakistan, which advises the government on policy issues, has made clear that it believes the export of alcohol abroad would damage the country's international image. The council's secretary Riaz-ur-Rehman confirmed: "We cannot allow anyone in the country to be engaged in the trade or production of alcohol."

Meanwhile, the company, which earlier this year produced the Muslim world's first 20-year-old malt, provides the state and federal authorities with around $1m (£604,000) a month in taxes and duty.

"Absurd as it sounds, it's true," said Mr Bhandara, who is a member of Pakistan's tiny population of Zoroastrians or Parsis and is also, ironically, a teetotaller, even though he is permitted to drink because of his religion. "It's totally hypocritical. I'm talking to the government at the moment about permission to export our beer to Britain [where it would be marketed with the catchphrase 'Have a Murree with your curry'], as many Asians in Britain are familiar with our products. Carlsberg were going to brew and sell it in the UK but then they said the beer market was shrinking. I am saying to them we have a 20 per cent increase in beer sales year-on-year in a Muslim country."

The Murree Brewery, shares of which are publicly traded on the Pakistan stock exchange in Karachi, was initially established in 1860 among the woods and cooling breezes of the Murree Hills, 20 miles north of Islamabad, where the elevation of 6,000ft was perfect for producing light beer for British colonial troops. Growing demand for its award-winning products saw the company establish additional breweries in Quetta in 1886 and in Rawalpindi in 1889, the site of the current operation.

On a recent morning, bright with early winter sunshine, Jamshed Iqbal, the company's enthusiastic quality control manager, led The Independent on a tour of the facilities. "Making liquor is easy, but brewing beer is an art," he said, describing the challenges of temperature control in a region where the summer mercury can top 45C.

Part of his duties include checking the taste of the finished products to ensure consistency. He said he believed the company's "classic" lager had the best taste. But as a Muslim, was he allowed to taste it? "Just a mouthful," he replied.