BREWING is the industry which has dominated the local headlines in recent weeks. Talk of sell-offs, threats over the long-term future of one of East Lancashire's oldest companies and then one of the biggest investments in manufacturing seen in the area this decade have produced a confusing picture of what is happening to some of our biggest local employers. Business editor PERRY GOURLEY examines whether the brewers' glass is half empty or half full. . .

BREWERY bosses usually love the summer. For them, there's no better sight than a packed beer garden on a warm August afternoon.

But for the 1,000 East Lancashire workers who work in our two major breweries, this summer has been interrupted by cloudy spells.

As nearly one pint in every ten drunk in Britain is brewed in East Lancashire, the region feels the changing fortunes of the industry more than most. The 600 who work at Whitbread's Samlesbury brewery - one of the biggest in Europe - have spent the last two months with uncertainty hanging over them over whether or not they were to be sold off as their parent company bidded to become the biggest pub operator in the country.

And at Thwaites, Blackburn, employees were warned that unless they signed a new agreement on working conditions they risked losing their jobs.

Whitbread and Thwaites are both at the sharp end of troubled times. Ironically, they both represent both sides of an increasingly divided industry. Barely a week goes by without one of Britain's regional breweries announcing job losses or closures. Many have pulled out of brewing altogether to concentrate on operating pubs instead and having their brands brewed at one of the major breweries.

For many regionals it has proved impossible to compete with the big brewers such as Whitbread. Mass production means they can not get the economies of scale needed to make the profit margins.

And it is the regional brewers who are bearing the brunt of illegal beer smuggling and legal booze cruises which see millions of cheap pints flooding into the country every day.

Thwaites is now becoming one of the last of what appears a dying breed. But it is determined to remain a brewer. In a letter to staff recently, managing director Paul Baker starkly spelt out the company's view of them not signing the new agreement which is aimed at improving efficiency and cutting costs.

"The end result would be that like many other regional brewers, production would cease to be a part of the business and the company would continue only as a 'pubco'.

"This is not a situation which the board and, I am sure, the majority of our employees, tenants and customers want to contemplate."

Despite union protests of bullying tactics, employees have agreed to the new conditions, which the firm has said are vital to cut costs and remain competitive.

Seven miles down the road at the Whitbread site, employees faced the prospect of the brewery being the subject of a forced sell-off if the firm's bid for Allied's pub chain had been successful.

For the time being that prospect appears to have faded. In any event, Samlesbury boss Paul Porter-Smith believes the local workforce has little fear even if a sale or flotation of the beer arm of Whitbread did happen.

He said: "We have been through a lot of changes here and those changes were essential to make sure Samlesbury got to the position where it is now.

"Our employees here work for a very successful beer company and I am very confident of their abilities."

According to the man who represents the North West's beer industry, the tough times endured by the brewing industry have left the survivors fitter than ever.

Lee Le Clercq, secretary of the North West Brewers' & Licensed Retailers Association, said: "The whole drinking industry has changed dramatically over the last decade. There is much more competition than there ever was before,"

The major changes in the industry were heralded by the introduction of the Beer Orders a decade ago, brought in by the Government which wanted to introduce more competition in an industry dominated by a handful of major brewers and pub owners.

The legislation placed restrictions on the number of pubs companies could own and forced outlets to stock a range of beers, not just those from the brewery they were linked with.

On top of that, the tastes of drinkers has changed dramatically. Not too long ago brewers could make a good living from just traditional ales, with little thought given to packaging or brand awareness.

Today it is a very different picture at the bar. Customers have a wider range of choice than ever.

The choice between mild, bitter stout or a bottle of light ale has turned into a bewildering array of drinks at the bar. It is not just beer brands competing but the choice now includes cask and keg, the 'nitro' smooth beers, continental bottled lagers, alco pops and so on.

Tastes change faster than ever and brewers must invest heavily in product innovation and development.

At Thwaites the launch of their Smooth beer represented a major investment in both the product and a major advertising campaign featuring Coronation Street character Reg Holdsworth.

Whitbread's new £12million bottling plant is to enable the brewery to use innovative new packaging to help drive sales forward.

There is undoubtedly still something of a hangover from a decade of change. But with investment in new products and a willingness to change, there is no sign yet of time being called on East Lancashire's brewing industry according to Mr Le Clercq.

He said: "Our brewers are among the best in the business.

"Provided they can continue to produce good quality products, at what are some of the cheapest prices in the country, they will prosper."

Converted for the new archive on 14 July 2000. Some images and formatting may have been lost in the conversion.