Punch Taverns moots £3.7b merger with beleaguered M&B – For more hospitality stories, see what the weekend papers say

Punch Taverns moots £3.7b merger with beleaguered M&BPunch Taverns has approached beleaguered pub company Mitchells & Butlers with merger proposals that would create a £3.7b pub giant headed by Punch chief executive Giles Thorley and his chairman Phil Cox. The move followed last week's revelation that M&B was launching a strategic review after taking a £274m loss after closing a hedge fundhttp://www.independent.co.uk/" target="_blank" rel="noreferrer">The Sunday Times](http://www.sunday-times.co.uk/), 3 February

Flying whale heralded as the eco-friendly hotel of the future The Manned Cloud, a luxury airship that has been likened to a "flying whale", is being promoted by its French designers Massaud Studio as the eco-friendly hotel of the future. "The idea is that passengers can see fantastic places like Thailand and the Caribbean without the need to build ugly hotels everywhere," said a company spokeswoman, said. Due for launch in 2020, the Manned Cloud will carry 40 passengers and provide a restaurant, library, gym, bar room and terraces with panoramic views. It will be nearly 700ft long and 170ft high and be able to travel 3,100 miles at its cruising height of 18,000ft before needing to refuel. It will have a cruising speed of 81mph and a top speed of 105mph. - [The Times](http://www.timesonline.co.uk), 2 February

Kenya unrest hits tea crops The violence in Kenya that has cost 850 lives since December's disputed presidential elections has hit tea supplies. Prices rose to a two-year high last week to reach an average $2.26 a kilo, according to Africa Tea Brokers. And the unrest, which is mostly in the western part of Kenya where most of its tea is produced, has combined with dry weather to affect harvesting and processing to damage production, which the Kenya Tea Board says will fall by 7% this year to 335 million kg. PG Tips maker Unilever said its 5,000 hectares of tea estates had been looted and damaged and that it had been forced to employ temporary workers after the violence drove many employees (who continue to be paid) to their ancestral homes.- [Daily Telegraph](http://www.telegraph.co.uk/), 2 February

Laurel Pub Company renegotiates its loan agreementsLaurel Pub Company - owner of the Yates's and Slug & Lettuce chains - is renegotiating the terms of its £16.5m loan agreement with its bankers. It hopes to reach agreement with its main lenders, Dresdner Kleinwort and Kaupthing, before the end of March. While Laurel has not breached its banking covenants, it has been challenged by the slowdown in consumer spending, the smoking ban, and the increasing number of customers buying drinks more cheaply in supermarkets. The group extended its borrowings last May when it organised a bridging loan to fund its acquisition of the La Tasca Spanish restaurant chain.- [The Sunday Times](http://www.sunday-times.co.uk/), 3 February.

Wine trade warns against raising alcohol taxes A 10% rise in excise duties on alcohol would cost the industry more than 50,000 jobs and the economy some £2.8b in revenue, warns the Wine and Spirit Trade Association ahead of the budget on 12 March. A study commissioned by the trade body calculated that a 10% hike in duties would do little to reduce problem drinking and generation no more than a 1.9% reduction in wine consumption and a 4.8% drop in the consumption of spirits…"Increasing the excise duties on wine and spirits could run the risk of a quintuple whammy - leaving heavy drinking unaffected, reducing the enjoyment of innocent drinkers, encouraging illegality through smuggling, losing tax revenue and reducing GDP," says the study. The WSTA has already warned that drinkers will have to pay 10% more because of poor grape harvests and the rising cost of raw materials. - [The Independent on Sunday, 3 February

By Angela Frewin