Smiles brewery in debts crisis

One of Bristol's oldest breweries, Smiles, has gone intoadministration days after announcing a merger plan.

The company is said to be struggling with mounting debts and islooking for another brewer to bail it out.

Two days ago Ron Kirk, the managing director of the Portbury-based company, told the Evening Post that Smiles Brewery had been intalks with regional and national breweries to seek a merger deal thatwould strengthen it.

But problems have been deeper than expected.

Smiles was taken over a year ago by investment vehicle City CentreBreweries in a GBP1.1 million deal.

Mr Kirk said the company had been through a troubled period beforeit was taken over.

He said: "What we found is that although it has great potential,it is going to take somewhat longer to develop regionally andnationally than we had thought.

"We were not prepared to take on the financial risks that werebeginning to arise. So, in view of our ongoing discussions with anumber of interested parties, we decided to put the business intoadministration.

An administrator has now been appointed to find a brewery or pubchain to take over or merge with Smiles.

Mr Kirk said: "Smiles is continuing to trade and we do hope tokeep the brand name going. But we're looking at other interestedparties to see if we can merge.

"We've had to put Smiles into administration but we're not goingout of business.

"Our position has always been to look at the recovery of SmilesBrewery. One of the options we're looking at is selling the businesson or a merger."

He said that a deal would be known within a week.

Mr Kirk said that the brewing and pub trade was "pretty rigid" andalthough the firm could see progress down the line, it was not goingto happen fast enough.

Smiles owns the well-known pubs the Brewery Tap, in Upper MaudlinStreet, and the Cornubia, in Temple Street, and employs 20 staff.

Mr Kirk said that the two pubs would remain within the company'sportfolio.

The Cornubia has been a prize-winning pub for its real ales foryears. It was Bristol and District Camra's Real Ale pub of the yearin 2001 and 2002.

Smiles' beers have been highly rated by Camra, the Campaign forReal Ale.

Peter Bridle, of Camra Bristol, said: "We hope that Smiles willsurvive as an independent brewery. We're all about consumers' choice.

"There is a demand for good, locally produced, real ales. Sincethe 1970s, there have been more than 350 breweries set up all overthe country.

"The people of Bristol would be sorry to see Smiles close as theyhave very fond memories of when Smiles was first founded.

"It has always been regarded as making fine beers. We hope it cansurvive but it also needs to be restructured."

There is no indication yet whether a merger or take over wouldmean job losses or job creation.