Hall & Woodhouse has quit the "volatile business" of soft drinks production with the loss of 220 jobs because it "can no longer viably compete".
The brewer, famous for its Badger ale range, is currently finalising a deal with a contract manufacturer to outsource production of its Rio and Popzone brands, and will now focus investment on its pubs and beer brands.
"Our decision to exit soft drinks production has not been taken lightly, but is unavoidable," said Peter Greensmith, chief executive of the Hall & Wood-house Take Home division.
"Our key competitors have the strategic advantage of lower production costs through greater scale, lower wage costs, better geographical location and more efficient and up-to-date plants, which can better service the change in customer preferences."
Greensmith said the only way to combat these factors was via a massive capital investment. But the company could not foresee any return so had decided to eliminate the loss-making side of the business.
He added: "These changes mean we can increase our already heavy investment in brand development and support, and in our pub structure, both of which are showing growth."