Scottish & Newcastle yesterday stole a march on rivals in the brewing industry by reporting strong sales of its four flagship UK brands.

S&N - Britain's biggest brewer - said volumes of Kronenbourg and Foster's lager, Strongbow cider and John Smith's ale rose 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 group's performance was in stark contrast to rival InBev, which recently blamed a weak UK market for a 3.9 per cent drop in global sales of its best-selling Stella Artois brand.

S&N, parent of Hereford cider maker Bulmer's, agreed that the UK market was soft but added it was grabbing market share, despite overhauling its drinks portfolio.

This has seen the company hand back control of the Beck's brand in the UK to InBev for £77 million, quit distributing Miller Genuine Draft and dispose of Kestrel.

Scottish & Newcastle, which accounts for one in every four beers sold in the United Kingdom, said the shake-up had cost it one per cent of the beer market but this had all been recouped by growth of its existing brands.

Chief executive Tony Froggatt said John Smith's had grown when sales of ale had slumped by seven per cent.

"This is quite extraordinary in a market declining that much," he added.

Growth was underpinned by spending on advertising, with 90 per cent put behind its quartet of leading brands, and the launch of new products such as Foster's Super Chilled.

The strong UK performance contributed to S&N posting pretax profits in line with expectations of £163 million, up 8.7 per cent on a year ago.

Sales of £1.88 billion during the six months were higher than the £1.82 billion at the same stage of 2004.

Mr Froggatt said: "I am particularly pleased with the response of our brands across the group to the increased focus and funding designed to drive value growth in some difficult market environments."

S&N said it was growing volumes of its beers in pubs, bars and restaurants in the UK by 1.8 per cent despite the widely reported trend of people opting to drink at home.

Savings from closing historic breweries at Edinburgh and Newcastle combined with sales growth would continue to stimulate operating profits during the second half, Mr Froggatt said.

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

The group said that for its UK core beer and cider business, comparable beer and cider volumes rose 1.3 per cent - increasing in both the ontrade and off-trade by 1.8 per cent and 0.5 per cent respectively.

Pricing was level with a modest price decline of minus 0.6 per cent in the on-trade and an increase of one per cent in the off-trade.

Adjusting for portfolio rationalisation, it said the core beer and cider business showed even stronger growth, with a 2.3 per cent volume increase and pricing up 0.5 per cent.

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.

"There was clearly a steeper decline in western Europe, and especially France with profits off ten per cent, which surprised many after last week's strong Russian numbers from BBH," said one leading industry analyst.

S&N shares closed down 9p at 4583/4p.