SCOTTISH & Newcastle said yesterday the closure of the Tyne Brewery would help it save more than £30m this year.

The brewer said savings from shutting the brewery - along with its Edinburgh brewery - combined with sales growth, would continue to stimulate operating profits during the second half.

Out of a target of £60m of savings, S&N has already realised £14m and predicted a further £17m would come through during the remainder of the year.

The last bottles of Newcastle Brown Ale came off the production line in May after S&N closed the Tyne Brewery and moved production to the Federation Brewery in Dunston, Gateshead.

As part of the new-look company, Tyne Brewery and Federation Brewery merged and is now called Newcastle Federation Breweries.

S&N yesterday reported strong sales of its four flagship brands.

It said volumes of Kronenbourg and Foster's lager, Strongbow cider and John Smith's ale grew by 5.5 per cent during the six months to June 30, when the overall beer market was shrinking by 3.9 per cent.

The company, which accounts for one in every four beers sold in the UK, said the changes had cost it one per cent of the beer market but this had all been recouped by growth of its existing brands.

Much of S&N's recent growth has come from its Baltic Beverages Holding, where volumes grew by 14 per cent, largely on the back of strong growth in Russia.

In its other markets, S&N said France was suffering the most from deteriorating consumer confidence but this could improve as comparable second-half sales last year were hit by poor weather.