Scottish Courage, Scottish & Newcastle’s UK operation, is to close its Tyne Brewery in Newcastle and move its operations to the Federation Brewery. Scottish Courage has bought the Federation Brewery, in Dunston, from Northern Clubs Federation Brewery for £7.2m. The division has also made an offer of £16.2m to acquire the remaining assets of NCFB. Scottish Courage said the Tyne Brewery's low capacity utilisation and city centre location meant production was "no longer commercially viable". Federation brewery was established at the end of the First World War as a co-operative of the Northern Working Men clubs and Army clubs. John Coppinger, the chairman of NCFB, said: "While the end of our independence is a sad day, in Scottish Courage, I am delighted that we have a purchaser who will help us to realise our goals and together, secure the future for the brewery." The Tyne Brewery is expected to close in Spring next year. The combined site will employ 170 people, to be taken from the 150 employees currently at Tyne and the 130 at The Federation. Scottish Courage will seek volunteers for redundancy from both sets of employees. The Transport and General Workers Union said: "We are disappointed with the news of another Scottish & Newcastle brewery closure but we are assured that the major regional brands will continue to be brewed on Tyneside through the acquisition of the Federation brewery. "This news is bad for jobs and we will do all we can to avoid compulsory redundancies when the plant closes in eight months' time." Production of the Newcastle ale brands, including Newcastle Brown Ale, will remain on Tyneside, while production of other Scottish Courage brands will transfer to Tadcaster. John Dunsmore, the chairman and managing director of Scottish Courage, said: "Both breweries have been operating below industry standards of capacity and efficiency. "By joining forces, Scottish Courage and The Federation are able to preserve a home on Tyneside for the continuation of two long and enduring brewing traditions." The move comes two months after Scottish Courage announced that it was closing its Fountainbridge Brewery in Edinburgh, with the loss of 170 jobs.