New company nets Smiles in £1.1m deal
by The PMA Team Bristol-based independent brewer Smiles has been taken over bya newly-formed venture-capital backed company in a £1.1m deal.
City Centre Breweries Ltd says it has ambitious plans to re-vitalise Smiles' brewing operations and build a small tied estate of 20 pubs.
Its three-year strategy for Smiles could be followed by more new brewing ventures focused on other city-centre sites across the UK.
The new company is being backed by venture capital specialist Close Venture Management, with the money funded through three separate investment funds.
Former Mansfield Brewery managing director Ron Kirk is returning to the industry to lead the new management team at Smiles alongside retail businesses specialist Richard Gibbs.
Kirk said Smiles intended to consolidate its already strongpresence in the Bristol area and expand its supply network within a 40-mile radius of the city.
"We will be building on Smiles' excellent reputation for producing quality cask beers with investment in the brewery plant and the launch of a new retail estate of community pubs in the Bristol area," he revealed.
"More guaranteed tied supply will help lift volumes, although the new team will also be seeking to win extra free-trade business.
"The brewery currently produces about 8,000 barrels per year, some way short of the 14,000 capacity.
"What pubs we acquire will depend on what the market throws up, but we are aiming for about 20 freehold pubs, which may be acquired piecemeal or in packages if the right deal comes along."
City Centre Breweries was initially formed with plans to build an entirely new brewery in Bristol, until the Smiles opportunity presented itself.
Kirk said the company's long-term strategy was to return brewing to city-centre sites across the UK.
"Many city-centre breweries have closed their doors over the years and some well-known names have disappeared," he explained.
"We feel there is a lot of scope for investing in small brewery sites in cities like Bristol which have lost their breweries."
Smiles was originally formed in 1978 and built up a small tied estate of 16 pubs which were sold to Young's of London in 2002.
The company now has just one brewery tap pub and supplies beer to more than 200 accounts in Bristol and its surrounds.
CVM said its investment represented a significant opportunity to further develop and expand a strong regional brand, supported by an integrated brewing strategy, combining a niche brewery with a focused retail offering.
