Whitbread `considering brewery closures'

Speculation was mounting last night that Whitbread, the brewing and pub giant, is about to close two of its five breweries with the loss of several hundred jobs. The Flowers brewery in Cheltenham and its brewing operation in County Durham, which produces Castle Eden and Trophy Bitter, are likely to be axed. Drinks analysts in the City seemed unsurprised by the rumours.

One said: "Their three big breweries in Manchester, North Wales and Preston all have capacity to produce more than a million barrels each and could be made to squeeze out Whitbread's current total production of 5.5 million barrels between them."

The rumoured targets for closure are the smallest breweries in the group, analysts point out. Castle Eden has capacity of about 250,000 barrels while Cheltenham produces 500,000 barrels a year of Flowers. "Both are largely cask ale producers," one analyst said, "and that is a section of the market in decline. We can expect an uproar from Camra [the Campaign for Real Ale lobby group] if these closures go through." Instead, Whitbread will concentrate on its big-selling brands such as Stella Artois and Boddingtons.

- Andrew Yates