Pyramid Breweries is moving most of its production to Portland Brewing, a brewery it bought last year, to allow it to make more beer and...

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Pyramid Breweries is moving most of its production to Portland Brewing, a brewery it bought last year, to allow it to make more beer and to make room for new malt beverages.

The move will save Pyramid more than $1 million a year and will give the Seattle brewery more space to make Hefeweizen, its best seller. The shift starts next month and will be completed early in the second quarter.

The brewery expects to lay off up to 11 of its 200 Seattle employees.

The Seattle brewery will still make beer for its Seattle alehouse and local customers and will produce 24,000 to 30,000 barrels of malt beverages for a company Pyramid wouldn’t name.

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Pyramid bought Portland Brewing for $4.2 million last year in cash and stock to pump up its brand portfolio, give it a toehold in Oregon, and a brewery-restaurant in Portland.

The Portland and Seattle breweries can make up to 170,000 barrels of beer. The production shift will allow the company to make 80,000 more a year.

“At some point we knew we wouldn’t be able to grow Pyramid’s Hefeweizen and that we had to move,” said John Lennon, Pyramid’s chief executive officer and president.

Hefeweizen production grew 12 percent over the past three quarters and Lennon expects future increases.

The shift comes as Lennon, who became CEO in August, is trying to make the company profitable again.

Pyramid lost $1.2 million on sales of $34.6 million in 2003 and probably will post a loss for 2004.

The brewery, which reports annual numbers next week, lost $1.3 million out of $19.5 million in the first nine months of 2004.

“It seems like a shrewd move,” said Tom Dalldorf, editor and publisher of Celebrator Beer News in Hayward, Calif.

“[Malt beverage] doesn’t fit with their portfolio, and they won’t brag about it, but if it’s positive cash flow, why not?”

Kristina Shevory: 206-464-2039 or kshevory@seattletimes.com