Oskar Blues Brewery is taking over production of the distiller’s wash for Stranahan’s Colorado Whiskey in Denver. Oskar Blues will make about 3,000 gallons of Stranahan’s wash each week in its Longmont facility. Stranahan’s will purchase the wash and truck it to its Denver distillery.

Stranahan’s had been making its Straight Rocky Mountain Whiskey from distiller’s wash provided by Flying Dog Brewery in Denver. In January, Flying Dog shifted all its brewing to Frederick, Md.

“This is a very big deal for us,” said Oskar Blues founder Dale Katechis. “Jess and his team are whiskey mavericks, they’re doing for whiskey what craft brewers have done for beer. They’ve proven that with guts, talent and a blind eye to the status quo, one can make whiskey as good as any out there.”

Oskar Blues and Stranahan’s intend to develop various cross-promotional programs to highlight their collaboration.

Drinks conglomerate Diageo has announced a plan to upgrade the famous Guinness brewery at St. James gate and build a new brewery near Dublin, but also that it is selling property around St. James Gate and cutting 250 jobs.

This has led to speculation Diageo intends to sell Guinness, one of few beers in a portfolio dominated by spirits such as Smirnoff.

Paul Walsh, the chief executive of Diageo, said instead that Diageo had a five-year plan for Guinness. “This should make Guinness a more valuable asset for Diageo and its shareholders,” he said. “It would be a very convoluted way to go about selling Guinness.”

Rumors swirled a year ago that that Diageo would sell St. James’s Gate after it announced a review of the site. Walsh confirmed that this had been an option, but was discarded in favor of the new plan.

The company indicated plans to invest $1 billion at St. James Gate and on the new brewery. When work is completed in 2013, the firm’s existing plants in Kilkenny and Dundalk will close.

Diageo said its Kilkenny and Dundalk breweries had “played a critical role in the historic success” of Diageo’s beer brands in the Republic.

But a lack of scale “necessary for sustained success in increasingly competitive market conditions” meant that new plans had to be made.

Read more from the BBC and The Times.

Brewing giant InBev has reported disappointing first-quarter earnings, a combination of lower beer sales and higher ingredients prices.

In the United States, craft beer sales leader Boston Beer’s sales continued strong but the company lost money in the first quarter because of its bottle recall.

InBev, based in Belgium, predicted the second of the year would be stronger. Beer sales fell in key market Brazil, partly due to inflation, an early Carnival holiday season and poor weather conditions. In eastern Europe, another key driver of growth last year, volumes were off 5.7%.

Cost of sales grew by almost 10%. InBev said weighted average inflation in the countries in which it operated was moving towards a 5-6% range, higher than the 4% it had foreseen.

Boston Beer, brewer of the Samuel Adams beers, had a net loss for the quarter of $3.7 million, with the estimated negative impact of the recall on net income of $8.8 million. Its depletions from inventory increased 12%, indicating continued strong sales.

“We achieved 12% depletions growth in the first quarter over a very strong first quarter last year,” founder Jim Koch said. “We feel good about this growth and the continued overall positive craft beer category trends, even as our whole category has raised prices in the face of significant cost pressures.”

Thomson Financial reports that Pyramid Breweries and Magic Hat Brewing Co. have signed a letter of intent for Magic Hat to acquire Pyramid through an all-cash tender offer.

Magic Hat will pay $2.75 for each Pyramid share. The offer represents a 56% premium over Monday’s closing price of $1.76 for shares of Pyramid, a Seattle-based beer brewer.

The closing of the proposed transaction is anticipated to occur no later than August 31.

According to a joint press release, the board of directors of Pyramid has approved the transactions contemplated by the Letter of Intent.

“The combination of these two well established, high profile craft breweries will be very complementary given our respective brand portfolios and the geographies in which we predominantly operate. Additionally, there will be a number of important benefits for Pyramid to be part of a private company versus continuing to operate as a stand alone public entity. This consolidation makes both good strategic and financial sense and is well timed, particularly as the beer industry’s competitive dynamics continue to intensify,” Pyramid CEO Scott Barnum said for the press release. “The Company will continue to have offices in Seattle, its historical home, and will seek opportunities to capitalize on the enhanced assets and capabilities of the new combined entity.”

Martin Kelly, CEO of Magic Hat said, “We have a great deal of respect for Pyramid’s brand heritage, award-winning beers and its dedicated employees, and look forward to consummating this transaction, which provides both strategic and financial benefits both to Pyramid’s and Magic Hat’s stakeholders.”

Kelly previously served as CEO at Pyramid before joining Magic Hat.

From the Oregon Brewers Guild:

Figures released today by the Oregon Brewers Guild show 2007 was a banner year for Oregon’s craft brewing industry as production across the state grew at a rate of 8.1 percent. Total beer production for the state was approximately 860,000 barrels, or 285 million bottles of beer. That is an increase of more than 64,000 barrels, up from 796,000 barrels in 2006.

The industry posted strong growth despite increases in hop and barley prices, the two main ingredients in craft beer. Portland, Oregon currently has 32 microbreweries within its city limits, more than any other city in the world. The state of Oregon has 64 brewing companies operating 90 brewing facilities, with strong growth anticipated throughout 2008.

“The impact of the brewing industry stretches far beyond the breweries themselves,” said Brian Butenschoen, Executive Director of the Oregon Brewers Guild. “A strong production year supports a variety of local products including barley, hops, yeast and glass producers as well as providing nearly 5,000 family wage jobs and a draw for tourism across the state.”

Oregonians don’t just love to make great beer, they love to drink it, too. Of the beer brewed in-state, more than 11.4%, or 308,000 barrels, were purchased and consumed in Oregon. For draft beer, that percentage is even higher, with Oregon breweries producing 42% of all draft beer consumed in the state. This is the highest percentage of local craft draft beer consumption in the country.

You might want to read that last part again. Nearly one half of the draft beer sold in Oregon is produced in Oregon.