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Vaux calls time on 350 pubs and two breweries

VAUX, THE Sunderland-based leisure group, became the latest pub operator to call time on its brewing operations yesterday when it put its two breweries in Sunderland and Sheffield up for sale.

The decision follows a strategic review by new chief executive Martin Grant, who joined the group from Allied Domecq three months' ago, and severs the company's links with north- east brewing, which date back to 1837. The company also wants to sell its wholesale operations and 350 tenanted pubs to concentrate on its Swallow hotels division and other leisure interests.

The decision could threaten more than 600 jobs at the breweries if they cannot be sold. Around 500 staff work at the Sunderland site, which is best known for its Samson bitter and Lambtons "smoothbrew". More than 100 are employed at the Wards brewery in Sheffield.

However, the company said yesterday that interest has already been expressed in the breweries by Vaux director Frank Nicholson, the younger brother of the non-executive chairman Paul Nicholson.

Analysts said the breweries and pubs could fetch a combined pounds 100m.

Most said the real value would lie in the pubs, which could be worth up to pounds 60m. The value of the breweries would be heavily dependent on any contractual agreement with Vaux's remaining pub estate.

The Campaign for Real Ale criticised the company's decision saying it could lead to a reduction in the choice of regional beers. However, it welcomed the news that ownership may stay within the Vaux family.

Vaux, which sponsors Sunderland football club, said it would "continue to be a major player in the north east".

Vaux is keeping its 320 best tenanted pubs as well as its 180 managed outlets. These include its Barcentro cafe bar outlets and its Bramwell community pubs.

The 48 Swallow hotels have shown strong growth, the company said yesterday, with revenue per room ahead by 11 per cent on a like for like basis at pounds 40.48. Current trading across the group is broadly in line with expectations, it added.

News of the sell-off follows a wave of consolidation in the industry, which has seen a spate of brewery closures and mergers.

Scottish & Newcastle recently announced the loss of 300 jobs following the closure of headquarters in Northampton, the West Midlands and Chorley. Whitbread, Morland and Carlsberg have also either closed plants or put them up for sale.

Vaux shares closed 11.5p higher at 279p.