De Vere Group, the hotels to fitness clubs operator, said it was considering selling its loss-making Tavern drinks wholesaling division.

The poor performance at Tavern marred an otherwise optimistic trading update for the year to October.

There was steady growth in turnover at the group's De Vere and Village Leisure hotel chains and continuing expansion of the Greens health and fitness clubs.

But Tavern continued to prove a headache, despite a continuing programme of closures which will result in an exceptional charge of £3.3 million.

Trading at the drinks wholesaling business fell away in the second half of the year, a trend not helped by the poor summer. The division is now set to show a trading loss of £2 million in the second six months.

Providing a much-needed tonic from the hangover of the drinks business was the hotels division, which includes Brighton's Grand Hotel.

De Vere hotels recorded turnover up 12 per cent on 1999, with a good performance from both its two newly acquired hotels and its two recently redeveloped hotels.

One of the redeveloped businesses, the De Vere Belfry, has reported strong interest ahead of staging the Ryder Cup at its Belfry Golf Club near Birmingham next September.

Turnover at the Village Leisure chain was up six per cent on 1999, with two hotels, at Coventry and Dudley, opening this year and another, at Bury, Greater Manchester, due to open next summer.

On the health and fitness front there are now four Greens clubs, with a further seven scheduled to open by the end of 2001.

In total the group has 78,000 members of its golf and fitness clubs, - an increase of 18,000 on this time last year.