The new owner of Morrells has chosen the Dorset brewery Thomas Hardy to brew the famous beer.

Morrells has signed a deal allowing the Dorchester-based brewery to produce 10,000 barrels a year under contract.

The announcement signals the end of the St Thomas' Street brewery after more than 500 years of brewing in Oxford, but will be a comfort to local drinkers.

But the news will bring some comfort to beer drinkers. Thomas Hardy is a popular traditional brewery whose owner, Peter Ward, even lives in Oxfordshire, at Henley.

His company will now produce Oxford Ale, Graduate and Varsity. It has already brewed its first batch and Dorset Morrells is expected to be in Oxfordshire pubs by the end of next week. Morrells' head brewer, David Polden, said: "Final selection of the contract brewer was made after exhaustive trials and product tastings to ensure product matching."

The Oxford branch of Camra, the real ale group, said it was pleased with the choice.

Branch secretary David Hodges said: "Our biggest sadness is that Morrells beer is no longer going to be brewed here. But we have to say Thomas Hardy is a very fine brewery." Morrells'are looking forward with interest to tasting the new ales. The question is whether they can create the authentic Morrells taste.The taste of a beer is influenced by many factors, such as local water.

Morrells' chief executive, Paul Beadle, said: "I am delighted to announce that the brewing contract has gone to Thomas Hardy, an established and respected dedicated brewer. I am confident in their ability to produce Morrells ales to the high quality our pub customers enjoy."

Thomas Hardy was founded by the Eldridge family as the Green Dragon Brewery in 1837, the brewery began operating as Thomas Hardy Brewery following a management buy-out in 1997. It is now owned by Peter Ward, 53, formerly an executive director with Courage.

He said: "The competition around us was very tough. This is just the kind of opportunity we have designed our company to take." With the beer from Dorset now on its way, the challenge for bitter drinkers will be: "Can you taste the difference?"

Mr Hodges had no doubt: "I am sure that people who have drunk Morrells for a long time will be able to, but perhaps not everyone."

But the Morrells head brewer insisted: "Morrells brewing and material specifications have been adhered to throughout and continuity of supply of the same varieties of English malt, hops and yeast strain has been secured."

The Morrells brewery in Oxford is believed to be ready to stop all beer production at St Thomas' Street within days. The site will be sold for development, with Nuffield College keen to buy it for student accommodation.

Last month the company warned that some compulsory redundancies were inevitable but hoped the majority of the the 77 workers could be transferred to delivery service or even pubs.

The company was bought from the Morrell family in September by the pub chain tycoon Michael Cannon for £48m.

Beer production is due to stop at St Thomas' Street within days.

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