ARRAN Brewery is eyeing expansion south of the Border after agreeing a distribution deal with Ooberstock, the online drinks wholesaler.

The craft beer producer, which recently opened export markets in Spain, France and Japan, hopes the arrangement will lead to a 10-fold sales increase in England and Wales.

Ooberstock, founded by former drinks trade executive Arran Heal last year, said the brewer had the potential to achieve UK-wide distribution on the back of the deal.

The business already distributes around 1000 products for big drinks industry names, including Diageo, Pernod Ricard, Coca-Cola Enterprises and Heineken. Irn-Bru was one of several new brands signed up in the last ten days.

Ooberstock, which bills itself a "champion" of small craft beer producers, said is able to offer keener prices to bar owners because, unlike bricks and mortar retailers, it does not have its own warehouses and trucks.

Its distribution is handled by logistics specialist Kuehne & Nagel from two hubs, in Yorkshire and Berkshire, with Ooberstock guaranteeing that all orders are fulfilled within two days. The company's telesales operation is also out-sourced, meaning that the business only has three direct employees.

Commercial director Phil Newton said: "We offer them [Arran] the potential for national distribution that no other wholesaler will do from where they are currently based. They may not want to go national from day one, but we have the ability do that for them.

"It terms of delivery timescale, it is far quicker from order to actual delivery to outlet. At the moment it can take anything up to five days for an order to be delivered by [a traditional wholesaler]. With us it is 48 hours."

The owner of Arran Brewery, Gerald Michaluk, said he was drawn to working with Ooberstock because "like us it is innovative and creating waves in the established beer distribution market."

He added: "Its new innovative model suits us and we are confident of seeing Arran and its associated brands have a strong national presence."

The link-up with Ooberstock comes after Arran announced plans to establish production centres in overseas markets to mitigate the high cost of distributing beer from the island.

That came after the brewer was denied grant from the Scottish Government to help expand production on the island. Mr Michaluk said that expanding on Arran was not viable without assistance because of shipping costs and because small brewers lose tax relief as soon as production levels reach certain thresholds.