A tax payment worth US$700,000 has led to US craft brewer Pyramid Breweries posting a loss for 2006.

Pyramid, based in Seattle, reported an annual net loss of US$1.6m, up from a loss of US$1.1m a year earlier. Sales, however, rose 7% to US$54.3m, thanks to "rapid growth" from flagship brand Pyramid, CEO Scott Barnum said.

Barnum noted Pyramid now holds around 8% of craft beer sales on the west coast of the US, "an all-time high" for the company.

"The Pyramid brand family continues to outperform the strong growth in the craft beer category," Barnum said. "This is a great combination that should continue to help fuel the company's growth and progress. Pyramid is the only major craft brewer to have a leading style in the four fastest growing segments of the craft beer category."

Pyramid's move to settle a tax bill with the US authorities weighed on the bottom line. In October, Pyramid paid the federal Alcohol and Tobacco Tax and Trade Bureau US$700,000 following an audit of the brewer's tax returns.

Nevertheless, Barnum said the performance of Pyramid's flagship brand gave him confidence about the future.

He added: "I'm encouraged by the craft category dynamics and the solid growth of our beer business, both of which should help us to improve our prospects."