============================================================
              SECURITIES AND EXCHANGE COMMISSION
                    Washington, D.C. 20549

                   _________________________

                         FORM 10-QSB
                   _________________________

    Quarterly Report Pursuant to Section 13 or 15 (d) of the
                Securities Exchange Act of 1934

               For the Quarter Ended June 30, 1997

                Commission File Number  0-27458

                Nor'Wester Brewing Company, Inc.

        (Exact name of registrant as specified in charter)

        Oregon                          93-1099661
 (State or other jurisdiction of     (I.R.S. Employer
 incorporation or organization)    Identification Number)

                 _______________________________

                     66 SE Morrison Street
                      Portland, OR  97214
                         (503) 232-9771

      (Address, including Zip code, and telephone number,
    including area code, of registrant's principal executive
                              offices)

____________________________________________________________

Indicate by check mark whether the registrant (1) has filed 
all reports required to be filed by Section 13 or 15(d) of 
the Securities Exchange Act of 1934 during the preceding 12 
months (or for such shorter period that the registrant was 
required to file such reports) and (2) has been subject to 
such filing requirements for the past 90 days.      
                                 [ X] YES         [  ] NO

Transitional Small Business Disclosure Format       
                                 [  ] YES         [X] NO

      Number of shares of common stock outstanding as of 
                        June 30, 1997:

                3,711,097 shares, $.001 par value
============================================================
                 Nor'Wester Brewing Company, Inc.


                      INDEX TO FORM 10-QSB

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Part I - FINANCIAL INFORMATION

The information included herein is unaudited.  However, such 
information reflects all adjustments (consisting solely of 
normal, recurring adjustments) which are, in the opinion of 
the Company's management, necessary for a fair presentation 
of the results of operations for the interim periods.  The 
interim financial information and notes thereto should be 
read in conjunction with the Company's latest annual report 
on Form 10-KSB/A.  The results of operations for the six 
months ended June 30, 1997 are not necessarily indicative of 
results to be expected for the entire year.


Item 1 -- Financial Statements

Balance Sheet - June 30, 1997 and December 31, 1996. . . 

Statement of Operations - Three Months Ended and Six 
Months Ended June 30, 1997 and 1996 . . . . . .  . . . . 

Statement of Cash Flows - Three Months Ended and Six 
Months Ended June 30, 1997 and 1996 . . . .. . . . . . . 


Notes to Financial Statements. . . . . . . . . .. . . . .

Item 2 -- Management's Discussion and Analysis of 
   Financial Condition and Results of Operations . .  . .

Part II - OTHER INFORMATION

Item 3 -- Defaults on Senior Securities

Item 6 -- Exhibits and Reports on Form 8-K . . . . . . . .

Signatures . . . . . . . . . . . . . . . . . . . . . . . .



Item 1 -- Financial Statements


<TABLE>
                             NOR'WESTER BREWING COMPANY, INC.

                              Consolidated Balance Sheet
<CAPTION>
                                              June 30,
                                                1997            December 31
                                             (unaudited)            1996
                                            ------------        ------------
<S>                                         <C>                 <C>
ASSETS
Current assets:
   Cash and cash equivalents                $    40,269         $   252,049 
   Accounts receivable                          979,591             606,642 
   Income tax receivable                        103,761             103,761 
   Receivable from affiliated companies       2,272,069           1,798,350 
   Inventories                                  866,578             720,507 
   Marketing supplies                            36,841              77,530 
   Deferred consolidation charges               391,057                 -   
   Other current assets, net                    137,066             221,223 
                                            ------------        ------------
   Total current assets                       4,827,232           3,780,062 

Property and equipment, net                  11,453,795          11,968,471 
Other non-current assets, net                    65,000              40,000 
                                            ------------        ------------

Total assets                                $16,346,027         $15,788,533 
                                            ============        ============


LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Line of credit                           $ 1,050,000         $ 1,041,000 
   Current portion of long-term debt 
      and capital lease                       4,633,590           3,088,709 
   Accounts payable                           2,502,008           2,427,073 
   Container deposits                           115,985             130,921 
   Accrued payroll and other liabilities        281,512             309,256 
                                            ------------        ------------
Total current liabilities                     8,583,095           6,996,959 

Long-term debt and capital lease                 12,166              11,405 
                                            ------------        ------------
   Total liabilities                          8,595,261           7,008,364 

Shareholders' equity:
   Common stock, no par value - 10,000,000 shares
     authorized, 3,711,097 and 
     3,711,097 shares outstanding            11,064,480          11,064,480 
Retained deficit                             (3,313,714)         (2,284,311)
                                            ------------        ------------

Total shareholders' equity                    7,750,766           8,780,169 
                                            ------------        ------------

Total liabilities and shareholders' equity  $16,346,027         $15,788,533 
                                            ===========         ============
</TABLE>


<TABLE>
                             NOR'WESTER BREWING COMPANY, INC.

                          Consolidated Statement of Operations
                                       (unaudited)

<CAPTION>
                          Three Months Ended June 30,     Six Months Ended June 30,
                               1997          1996             1997          1996
                           ------------  ------------     ------------  ------------
<S>                        <C>           <C>              <C>           <C>
Gross revenues             $ 1,514,505   $ 2,024,354      $ 2,831,718   $ 3,579,200 
Less: excise taxes              53,009        86,031          116,373       161,093 
                           ------------  ------------     ------------  ------------
Net revenues                 1,461,496     1,938,323        2,715,345     3,418,107 

Cost of sales                1,261,090     1,503,110        2,262,469     2,471,377 
                           ------------  ------------     ------------  ------------

Gross profit                   200,406       435,213          452,876       946,730 

Selling, general and
   administrative expenses     695,713       873,984        1,232,142     1,349,455 
                           ------------  ------------     ------------  ------------

Loss from operations          (495,307)     (438,771)        (779,266)     (402,725)

Interest income (expense)and 
   other income (expense),net (131,539)       51,252         (250,137)       89,572 
                           ------------  ------------     ------------  ------------

Loss before income taxes and 
   minority interest          (626,846)     (387,519)      (1,029,403)     (313,153)

Provision for income taxes         -          29,004              -             -   
                           ------------  ------------     ------------  ------------

Loss before minority interest (626,846)     (358,515)      (1,029,403)     (313,153)

Minority interest                  -          76,777              -          94,469 
                           ------------  ------------     ------------  ------------

Net loss                   $  (626,846)  $  (281,738)     $ 1,029,403)  $  (218,684)
                           ============  ============     ============  ============

Net loss per common share  $     (0.17) $      (0.08)     $     (0.28)  $     (0.06)
                           ============  ============     ============  ============
 
Weighted average number of
common shares outstanding    3,711,097     3,710,419        3,711,097     3,680,987 
                           ============  ============     ============  ============
</TABLE>


<TABLE>
                              NOR'WESTER BREWING COMPANY, INC.

                            Consolidated Statement of Cash Flows

                                         (unaudited)
<CAPTION>
                                                     Six Months Ended June 30,
                                                      1997               1996
                                                 ------------        ------------
<S>                                              <C>                 <C>
Cash flows from operating activities:
     Net loss                                    $(1,029,403)        $  (218,684)
     Minority interest in loss from joint venture        -               (94,469)
     Increase in deferred rent                           -                24,000 
     Reconciliation of net income to net cash 
        provided by operating activities:
        Depreciation and amortization                422,229             142,098 
        Changes in assets and liabilities:
           Accounts receivable                      (372,949)           (501,036)
           Inventories                              (146,071)           (129,416)
           Marketing supplies                         40,689                 -   
           Deferred consolidation charges           (391,057)                -   
           Other current assets                       84,157             307,154 
           Other non-current assets                  (25,000)             (4,467)
           Accounts payable                           74,935            (188,949)
           Container deposits                        (14,936)                -   
           Accrued liabilities                       (27,744)            (286,440)
                                                 ------------        ------------

     Net cash used for operating activities       (1,385,150)           (950,209)

Cash flows from investing activities
     Sale of property and equipment                  220,000                 -   
     Purchases of property and equipment            (127,553)         (4,952,571)
                                                 ------------        ------------

     Net cash provided (used) for investing 
        activities                                    92,447          (4,952,571)
                                                 ------------        ------------

Cash flows from financing activities:
     Payments on credit facilities and 
        long-term debt                              (140,959)           (200,000)
     Increase in borrowings                        1,695,601             230,558 
     Advances to affiliates                         (473,719)           (538,786)
     Net proceeds from stock offering                    -             7,693,916 
                                                 ------------        ------------

Net cash provided by financing activities          1,080,923           7,185,688 
                                                 ------------        ------------

Net increase (decrease) in cash and 
   cash equivalents                                 (211,780)          1,282,908 

Cash and cash equivalents:
     Beginning of period                             252,049             276,807 
                                                 ------------        ------------

     End of period                               $    40,269         $ 1,559,715 
                                                 ============        ============
</TABLE>



BASIS OF PRESENTATION

The Company's financial statements enclosed herein are unaudited and, 
because of the seasonal nature of the business and the varying schedule 
of its special sales efforts, these results are not necessarily 
indicative of the results to be expected for the entire year.  In the 
opinion of management, the interim financial statements reflect all 
adjustments, consisting of only normal recurring items which are 
necessary for a fair presentation of the results for the periods 
presented.  The accompanying financial statements have been prepared in 
accordance with GAAP and SEC guidelines applicable to interim financial 
information which require management to make certain estimates and 
assumptions.  These estimates and assumptions affect the reported 
amounts of assets and liabilities, the disclosure of contingent assets 
and liabilities as of the date of the financial statements, and the 
reported amounts of revenues and expenses during the period.  Actual 
results could differ from those estimates.  The accompanying financial 
statements and related notes should be read in conjunction with the 
financial statements and notes thereto included in the Company's Annual 
Report on Form 10-KSB/A.

The accompanying financial statement have been prepared assuming the 
Company will continue as a going concern.  The Company has recorded 
significant losses in the current year, has negative working capital of 
$3,755,863, is not in compliance with debt convenants, and has limited 
access to capital to fund future operations.  There can be no assurance 
that the Company will produce and sell its products on a profitable 
basis to sustain operations.  Such factors, among other, raise 
substantial doubt as to the Company's ability to continue as a going 
concern.

In light of significant losses and negative working capital the Company 
has developed and is implementing plans for the continuation of the 
business.  In particular, the Company has taken steps to:  (i) reduce or 
eliminate cooperative brewing arrangements which proved to be 
inefficient and costly;  (ii) eliminate national roll-out programs in 
favor of stepped-up regional sales and marketing efforts; (iii) 
negotiate with past due creditors which could involve extended terms and 
payment plans; (iv) hire and retain high-quality employees familiar with 
the brewing industry, (v) use available bridge loans from a proposed 
investor (see Proposed Merger note) to fund operations until new 
strategies result in positive cash flows and improved profitability, 
and; (vi) use proceeds from the disposition of duplicative and/or under 
utilized assets created by the proposed merger.  Management believes 
these plans will result in the Company sustaining operations as a going 
concern for the next 12 months.

As part of the plan, the Company entered into an investment agreement to 
be merged with other affiliated companies and convert its stock into 
shares of a new publicly traded entity as discussed in the Proposed 
Merger note.

Statement of Cash Flows

The Company considers short-term investments which are highly liquid, 
have maturities of fewer than three months and are readily convertible 
into cash to be cash equivalents.

Inventories

Inventories consist of the following:

                               June 30,          December 31
                                1997                1996    
                              -----------        -----------
Raw Materials                 $  496,366         $  460,423 
Work-in-process                  101,849             75,553 
Finished goods                   268,363            184,531 
                              -----------        -----------
                              $  866,578         $  720,507 
                              ===========        ===========

Property and Equipment

Property and Equipment consists of the following:

                               June 30,          December 31
                                1997                1996    
                             ------------       ------------
Land and improvements        $    23,071        $   243,071 
Leasehold improvements         2,364,545          2,338,391 
Equipment                     10,093,616          9,612,828 
Construction in progress         168,403            547,792 
                             ------------       ------------
                             $12,649,635        $12,742,082 
Less accumulated depreciation (1,195,840)          (773,611)
                             ------------       ------------
                             $11,453,795        $11,968,471 
                             ============       ============

Shareholders' Equity

The Company is authorized to issue 10 million shares of its common 
stock.  Each share of common stock entitles the holder to one vote.  At 
its discretion, the Board of Directors may declare dividends on share of 
common stock, although the Board does not anticipate paying dividends in 
the foreseeable future.  During 1996, the Company completed a public 
offering of 1,115,000 shares of common stock at $7.00 per share.  The 
underwriters for the offering exercised an over-allotment option for an 
additional 172,500 shares of common stock at $7.00 per share.  Net 
proceeds to the Company totaled approximately $7,693,000, net of selling 
commissions and offering expenses of approximately $1,320,000.  In 
January 1996, the shareholders of the Company authorized 15 million 
shares of preferred stock to be available for issuance, the terms of 
which the Board of Directors have the authority to establish.  There are 
no current agreements or understandings for the issuance of any shares 
of preferred stock.

Net Loss Per Share

Net loss per common share is calculated based on the weighted average 
number of common shares and common share equivalents outstanding.  
Outstanding options to purchase shares of the Company's common shares 
have not been included in the calculations as their effect would be 
anti-dilutive.

Line of Credit and Notes Payable

The Company had a $1,000,000 revolving bank line of credit bearing 
interest at the bank's reference rate plus 0.5% (9.00% at June 30, 1997) 
which expired on December 31, 1996.  The line is secured by the 
Company's assets, and contains certain covenants and restrictions (see 
Proposed Merger note).  At June 30, 1997 $1,000,000 was outstanding 
under this line of credit.  In addition, the Company's North Country 
subsidiary had $50,000 outstanding on a separate line of credit bearing 
interest at 9.75% at June 30, 1997.  The Company has a $250,000 loan 
payable to its president, bearing interest at 10.5%.  Repayment of the 
loan is required upon completion of the proposed merger with UBA (see 
Proposed Merger note).  The Company has a $2.537 million bridge loan 
payable to UBA, bearing interest at 11.25%, related to an investment 
agreement the Company entered into during the three months ended June 
30, 1997 (see Proposed Merger note).  The Company has a $1,771,492 bank 
term loan which bears interest at 8.63% and is payable in equal monthly 
installments over seven years.  At June 30, 1997, $1,771,492 was 
borrowed under this facility.  This non-revolving credit facility and 
the revolving credit facility discussed above are secured by the 
Company's assets and contain covenants which require the Company to 
maintain financial ratios and prohibit the Company from making any 
dividend payments without the bank approval.  At June 30, 1997, the 
Company was not in compliance with certain loan covenants relating to 
both the non-revolving credit facility and the revolving credit 
facility.  The Company is involved in discussions with the lender in 
order to (i) renew the $1 million revolving line of credit facility to 
mature on the earlier of September 30, 1997, or 10 days following 
closing of the investment by UBA (see Proposed Merger note). and (ii) 
waive the loan covenants associated with theses loans so long as the 
Company remains in compliance with all terms of the investment agreement 
and achieves reasonable progress toward closing the investment with UBA. 
However, final approval of amendment to the lender's loan agreements has 
not yet been received.  If final approval is not received or if received 
but the Company subsequently violates the terms of the amendment, then 
the Company would be in default of its loans which could lead to 
foreclosure and sale of all or an important part of the Company's 
assets.  Such an event would have a material adverse impact on the 
Company's business, financial condition and results of operations.  The 
Company is obligated under the provisions of a capital lease to make 
monthly payments of $248 through the year 2002.

Stock Incentive and Stock Grant Plans

In 1993, the Board of Directors established a pool of 128,482 shares of 
the Company's common stock for a stock incentive plan for issuance to 
employees, consultants, distributors and their employees, and directors 
of the Company pursuant to the exercise of stock options granted under 
the plan or stock grants or stock sales.  Administration of the plan, 
including determination of the number of shares to be issued, the term 
of exercise of any option, the option exercise price, and type of 
options to be granted, lies with the Board of Directors or a duly 
authorized committee of the Board of Directors.  In January 1996, the 
shareholders of the Company approved an increase to the number of shares 
available under the Company's stock incentive plan to 360,000 shares.  
In January 1996, the shareholders also approved the adoption of a non-
employee director's stock option plan and the reservation of 40,000 
shares thereunder.  As of June 30, 1997, options for a total of 266,539 
shares have been awarded, net of cancellations.  Options have vesting 
periods ranging from two years to ten years.  Exercise prices range from 
$1.99 per share to $3.25 per share with a weighted average exercise 
price per share of $3.09.  No options have been exercised June 30, 1997. 
No compensation expense has been recorded as a result of granting any of 
the options as all such options were granted with an exercise price 
equal to the market price on the date of grant.  Options granted by the 
Company are expected to be converted to options of the new company 
expected to be formed in the consolidation of the Company and its 
affiliates.  See Proposed Merger note.  The options will be converted at 
the same conversion rate as the conversion of common stock discussed in 
the Proposed Merger note.

Income Taxes

No benefit for income taxes was recognized for the six months or three 
months ended June 30, 1997 and 1996 in the accompanying statement of 
operations as there can be no assurance that the Company will generate 
taxable income in the future against which such benefits could be 
realized. 

At June 30, 1997, the Company had a net operating loss carryforward 
aggregating approximately $3.3 million for federal income tax purposes, 
which may be used to offset future taxable income, if any.  The annual 
utilization of this carryforward may be limited if the Company undergoes 
the ownership change anticipated by management (see Proposed Merger 
note) or fails to meet continuity of business requirements defined by 
the Internal Revenue Code.  The Company's net operating loss 
carryforwards beginning expiring in 2010.

Related Parties

Nature of related parties
The Company's president, Jim Bernau, partially owns and controls 
Willamette Valley Vineyards (WVV), a winery in Oregon, Willamette Valley 
Inc. (WVI) and Nor'Wester Brewing Company, Inc.(Nor'Wester), a 
microbrewery in Oregon.  Additionally, Mr. Bernau is the president of 
each of the following subsidiaries of WVI: Aviator Ales, Inc. (AAI); 
Mile High Brewing Company (MHBC); Bayhawk Ales, Inc. (BAI); and North 
Country Brewing Company, Inc. (NCBCI); development stage companies 
located in Washington, Colorado and California, respectively.  As a 
result of certain arrangements between the Company and its affiliates, 
as well as Mr. Bernau's positions with and/or ownership interests in 
each of these companies, inherent conflicts of interest exist with 
respect to the pricing of services, the sharing of resources and 
allocation of the Mr. Bernau's time.

Related party transactions
For the three months ended June 30, 1996, the Company purchased human 
resources and other administrative services from affiliated companies, 
under a general services agreement at a total cost of $12,150.  For the 
three months ended June 30, 1997, the Company performed these services 
internally.  Under the general services agreement, the Company provided 
services such as accounting, sales management and executive oversight to 
WVI and it's subsidiaries and WVV.  The Company charged affiliates 
$42,285 for such services for the three months ended June 30, 1997 and 
$60,075 for the three months ended June 30, 1996.

Strategic Alliance and Cooperative Brewing Agreements
The Company has entered into a Strategic Alliance (the "Alliance") with 
AAI, MHBC, BAI, NCBCI, and WVI.  The Company, AAI, MHBC, and BAI are 
individually referred to as a "Cooperative Brewer."  The purpose of the 
Alliance is to promote and support the growth of all of the Alliance 
members by increasing production at each Cooperative Brewer's facility 
and supporting the entry of Nor'Wester products into new markets.  To 
achieve this goal, each Cooperative Brewer agreed to cooperatively brew 
Nor'Wester's products, and to support the entry of these products into 
new markets by facilitating Nor'Wester's access to the Cooperative 
Brewer's network of distributors.  However, due to the fact that 
Nor'Wester's Portland Brewery is not currently operating at capacity, as 
well as the fact that attempting to develop other regional markets for 
its products, the Cooperative Brewing Agreements are not being utilized.  
Should the consolidation occur as planned (see Proposed Merger note), 
the Strategic Alliance and agreements thereunder will terminate.  In 
connection with the Cooperative Brewing Agreement with AAI and MHBC 
described above, Nor'Wester advanced $250,000 to each AAI and MHBC 
during 1995 for the purchase of ingredients and packaging materials for 
the cooperative brewer's initial production of Nor'Wester's products.  
In 1996, the Company advanced $100,000 and $350,000 to AAI and MHBC, 
respectively, for the cooperative brewing purchases and operating 
expenses.  In addition, the Company provided a loan of $35,000 to 
Bayhawk Ales, Inc. ("BAI") for the purchase of a grain silo and milling 
system to reduce cooperative brewing costs.  At June 30, 1997 these 
advances remain outstanding.  Because management expects these advances 
will eventually be eliminated when the proposed merger occurs, as 
discussed in the Proposed Merger note, these advances have been 
classified as current receivables from affiliates at June 30, 1997.

Joint Venture Agreement and Principles of Consolidation 
In 1996, the Company entered into a joint venture agreement with NCBI 
for the purpose of constructing, owning and operating a brewery in 
Saratoga Springs, New York (the "Saratoga Springs Brewery").  Under the 
terms of this agreement, the Company contributed $4,000,000 in cash and 
equipment which was used to construct and operate the brewery, as well 
as certain intangible assets for a 61% interest in the joint venture 
known as North Country Joint Venture, LLC (NCJV).  The Company also 
advanced $2,550,000 to the joint venture.  NCBCI was to repay the 
Company $2,550,000 in cash by October 1996 for its 39% of the joint 
venture in accordance with the agreement.  NCBI did not repay the 
Company.  Accordingly, NCBCI's rights to NCJV terminated and Nor'Wester 
became the 100% owner of NCJV.  Because Nor'Wester owned 100% of NCJV at 
June 30, 1997, no minority interest is recorded in the accompanying 
balance sheet or statement of operations.

Receivables from affiliates
The Company has not been repaid for a significant portion of the 
services provided and cash advanced to the affiliated companies.  
Accordingly, the Company has recorded on the accompanying balance sheet 
receivables from affiliates aggregating $2.27 million.  Because these 
receivables are expected to be eliminated or received in cash after the 
proposed merger with UBA occurs (see Proposed Merger note), these 
receivables have been classified as current June 30, 1997  Receivables 
from each of the affiliated companies are as follows:

     WVV  $   50,584
     WVI     415,650
     AAI     805,651
     MHB     829,440
     BAI      74,616
     NCBI     96,128
          ----------
          $2,272,069
           ==========

These balances are not expected by management to be fully collected in 
cash.  Instead, a portion is expected to be collected when the assets of 
MHBC are sold subsequent to June 30, 1997 and the remainder are expected 
to be eliminated when the companies are merged into the new company 
expected to be formed (see Proposed Merger note).

Commitments

The Company has entered into five-year operating lease arrangements for 
brewery and pub facilities in Oregon and New York which expire on 
January 31, 2000 and February 15, 2002, respectively.  The term of the 
lease in Oregon is renewable for an additional 10 years.  The New York 
lease has three five-year renewal options.  Annual payments under the 
leases total $178,740 (totaling approximately $2,078,717, including 
payments under renewal terms, over the terms of the leases) plus net 
charges for property taxes, fire insurance, and utilities.  Rent 
payments are adjusted annually based on increases in the consumer price 
index, limited to no more than a four percent annual increase.  The 
Company paid lease consideration of $50,000 in 1995 to hold the New York 
facility until construction began.

Significant Customers

A significant portion of the Company's sales are to distributors located 
in Oregon.


Proposed Merger and Investment by UBA

In light of lower than anticipated 1996 operating results, lower than 
anticipated first quarter 1997 sales and other operating results and 
adverse conditions within the craft beer industry in general, 
representatives of UBA and management and the investment bankers of the 
affiliated companies renegotiated the terms of the original UBA 
investment discussed in Form 10KSB/A for the year ended 1996 and Form 
10QSB/A for the quarter ended March 31, 1997.  The renegotiation 
reflects a significantly lower valuation for the affiliate companies, a 
reduction in the total amount of cash to be invested by UBA to $5.5 
million and a reduction of UBA's percentage ownership position in UCB to 
40% following consolidation.  The Company and its affiliates (WVI, AAI, 
BAI and MHB) entered into an investment agreement with United Breweries 
of America, Inc. (UBA), an entity controlled by the UB Group of 
Bangalore, India.  The agreement provides for Nor'Wester, WVI, AAI, MHBC 
and BAI to merge into a company to be known as United Craft Brewers 
(UCB).  This proposed merger will result in the issuance of newly 
registered shares of UCB common stock in exchange for shares of 
Nor'Wester, WVI and its subsidiaries.  The merger and share exchange 
will require approval by the Boards of Directors and shareholders of 
each of the entities.  Following the merger, all shareholders in the 
Nor'Wester /WVI alliance will hold shares in UCB, a company which is 
intended to be listed for trading on the Nasdaq National Market system 
under the symbol ALES.  Shares of Nor'Wester, WVI, AAI, BAI, and MHB 
outstanding at the effective time of each merger (other than shares of 
Aviator common stock, Bayhawk common stock and Mile High common stock 
owned by WVI) will be converted into the right to receive 0.3333333, 
0.0785714, 0.0523809, 0.0785714 and 0.0523809 shares, respectively, of 
UCB common stock.

Impact of Recent Accounting Pronouncements

In February 1997, the Financial Accounting Standards Board("FASB") 
issued Statement of Financial Accounting Standards No. 128 "Earnings Per 
Share" ("SFAS 128") and Statement of Financial Accounting Standards No. 
129, "Disclosure of Information about Capital Structure" ("SFAS 
129")which are effective for fiscal years ending after December 15, 
1997. The Company believes the implementation of these statements will 
not have a material effect on its results of operations or financial 
statement disclosures. 

Subsequent Events

Final adoption of the Proposed Merger and Investment is subject to 
approval by shareholder vote scheduled to take place at the Company's 
annual shareholder meeting on August 25, 1997, shareholder approval by 
vote for each of the Company's affiliates (WVI, AAI, BAI and MHB) also 
scheduled to be held on August 25, 1997 and other closing conditions 
contained within the Investment Agreement.


Item 2 -- Management's Discussion and Analysis of Financial
          Condition and Results of Operations

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Information

This Management's Discussion and Analysis of Financial Condition and 
Results of Operations and other sections of this Form 10-QSB contains 
forward-looking information within the meaning of the Private Securities 
Litigation Reform Act of 1995.  This forward-looking information 
involves risks and uncertainties that are based on current expectations, 
estimates and projections about the Company's business, management's 
beliefs and assumptions made by management.  Words such as "expects," 
"anticipates," "intends," "plans," "believes," "seeks," "estimates" and 
variations of such words and similar expressions are intended to 
identify such forward-looking information.  Therefore, actual outcomes 
and results may differ materially from what is expressed or forecasted 
in such forward-looking information due to numerous factors, including, 
but not limited to, availability of financing for operations, successful 
performance of internal operations, impact of competition, changes in 
distributor relationship or performance, successful completion of the 
planned consolidation of the Affiliated Companies, and other risks 
detailed below as well as those discussed elsewhere in this Form 10-QSB.  
In addition, such statements could be affected by general industry and 
market conditions and growth rates, and general domestic economic 
conditions.  

Results of Operations

Three Months Ended June 30, 1997 Compared to Three Months 
Ended June 30, 1996

Gross Revenues

Gross revenues from beer, pub and retail products totaled $1,514,505 for 
the quarter ended June 30, 1997 compared to gross revenues of $2,024,354 
during the same quarter in 1996, resulting in a 25% decline in gross 
revenues.  The decrease in revenues is primarily a result of increased 
competition in its Pacific Northwest market from the continued 
proliferation of new and existing craft brewers and the introduction of 
fuller-flavored products by certain major national brewers.  North 
Country Brewery's gross revenues represented  $582,818 of consolidated 
gross revenues for the quarter ended June 30, 1997.

Nor'Wester's Portland Brewery currently has an annual production 
capacity of 41,000 barrels.  Nor'Wester sold 6,152 barrels and 8,360 
barrels during the quarter ended June 30, 1997 and 1996 respectively.  

Nor'Wester's Saratoga Springs Brewery currently has an annual production  
capacity of 30,000 barrels and sold 3,147 and 0 barrels during the 
quarter ended June 30, 1997 and 1996, respectively.

Excise Taxes

Excise taxes were $53,009 (3.5% of gross revenues) for the three months 
ended June 30, 1997 compared to $86,031 (4.2% of gross revenues) for the 
same period in 1996.

Cost of Goods Sold. 

Cost of goods sold totaled $1,261,090 (86% of net revenues) for the 
quarter ended June 30, 1997 compared to $1,503,110 (78 % of net 
revenues) for the quarter ended June 30, 1996.  The increase in cost of 
goods sold as a percentage of net revenues is due primarily to the 
commencement of brewing operations at the Saratoga Springs facility 
which is operating below designed capacity and the increased cost 
structure due to additional brewing equipment (tanks and cooperage) 
acquired to meet anticipated sales that never materialized.

Selling, General and Administrative

Selling, general and administrative ("SG&A") expenses increased to 
$695,713 (47% of net revenues) for the quarter ended June 30, 1997 from 
$873,984 (45% of net revenues) for the quarter ended June 30, 1996.  The 
increase in SG&A expenses is primarily attributable to marketing and 
related costs associated with initial production at the Saratoga Springs 
Brewery and increased shipping costs associated with delivering beer to 
markets located considerable distances from the Portland and Saratoga 
Brewing facilities. 

Net Loss

As a result of the individual line items discussed above, net loss was 
$626,846 for the quarter ended June 30, 1997 compared to a net loss of 
$281,738 for the quarter ended June 30, 1996.

Six Month Ended June 30, 1997 compared to Six Months Ended 
June 30, 1996

Gross Revenues

Gross revenues from beer, pub and retail products totaled $2,831,718 for 
the year ended June 30, 1997 compared to gross revenues of $3,579,200 
for the same period in 1996, resulting in a 21% decline in gross 
revenues.  The decrease in revenues is primarily a result of increased 
competition in its Pacific Northwest market from the continued 
proliferation of new and existing craft brewers and the introduction of 
fuller-flavored products by certain major national brewers.  North 
Country Brewery's gross revenues represented $1,080,125 of consolidated 
gross revenues for the quarter ended June 30, 1997.

Nor'Wester sold 10,631 barrels and 18,700 barrels during the six months 
ended June 30, 1997 and 1996, respectively.  

Nor'Wester's Saratoga Springs Brewery sold 5,667 and 0 barrels during 
the six months ended June 30, 1997 and 1996, respectively.

Excise Taxes

Excise taxes were $116,373 (4.1% of gross revenues) for the three months 
ended June 30, 1997 compared to $161,093 (4.5% of gross revenues) for 
the same period in 1996.

Cost of Goods Sold. 

Cost of goods sold totaled $2,262,469 (83% of net revenues) for the six 
months ended June 30, 1997 compared to $2,471,377 (72% of net revenues) 
for the six months ended June 30, 1996.  The increase in cost of goods 
sold as a percentage of net revenues is due primarily to the 
commencement of brewing operations at the Saratoga Springs facility 
which is operating below designed capacity and the increased cost 
structure due to additional brewing equipment (tanks and cooperage) 
acquired to meet anticipated sales that never materialized.

Selling, General and Administrative 

Selling, general and administrative ("SG&A") expenses increased to 
$1,232,142 (45% of net revenues) for the six months ended June 30, 1997 
from $1,349,455 (40% of net revenues) for the six months ended June 30, 
1996.  The increase in SG&A expenses is primarily attributable to 
marketing and related costs associated with initial production at the 
Saratoga Springs Brewery and increased shipping costs associated with 
delivering beer to markets located considerable distances from the 
Portland and Saratoga Brewing facilities. 

Net Loss

As a result of the individual line items discussed above, net loss was 
$1,029,403 for the quarter ended June 30, 1997 compared to a net loss of 
$218,684 for the quarter ended June 30, 1996.

Liquidity and Capital Resources

Nor'Wester had cash and cash equivalents at June 30, 1997, December 31, 
1996 and June 30, 1996 of $40,269, $252,049 and $1,559,714, 
respectively.  Cash was used for the six months ended 1997 to fund 
operating activities of $1,385,150, purchase equipment at the Saratoga 
facility for $127,553, make principal payments on it's Bank of America 
term loan of $140,959 and advance proceeds to affiliates for $473,719.  
Additional bridge loans provided by UBA of $1,646,000 was the primary 
source of funds during the same period.  From June 30, 1996 to December 
31, 1996, the primary uses of funds were to support the operating 
activities at the Portland and Saratoga brewing facilities, completion 
of construction, equipping and start-up activities at the Saratoga 
plant, advances to affiliates to support cooperative brewing activities 
and marketing efforts aimed at regaining market share in the Pacific 
Northwest.

The Company's working capital deficit was $3,755,863 at June 30, 1997, a 
working capital deficit of $3,216,897 at December 31, 1996 and working 
capital surplus of $3,260,021 at June 31, 1996.  At June 30, 1997, 
December 31, 1996 and June 30, 1996, the current ratio was .56:1, .54:1 
and 3.37:1, respectively. 

Accounts payable at June 30, 1997, December 31, 1996 and June 30, 1996 
was $2,502,008, 2,427,073, and $681,782, respectively.  Of the accounts 
payable total at June 30, 1997, $2,225,063 is past due.

At June 30, 1997, December 31, 1996 and June 30, 1996, Nor'Wester had 
receivables from affiliated companies of $2,272,069, $1,798,350, and 
$542,306, respectively.  The change during 1997 is due primarily to the 
need to support the brewing operations of Nor'Wester's affiliates as the 
affiliates continued to struggle in it's own increasingly competitive 
market place.  The increase in receivables from affiliates at December 
31, 1996 from June 30, 1996 is due primarily to the financial support 
Nor'Wester provided to the affiliates as each engaged to cooperatively 
brew Nor'Wester products coupled with and the operating losses as the 
affiliates continued to struggle in it's own markets.  Management 
expects that the receivables from affiliates will be eliminated upon 
completion of the Consolidation.

At June 30, 1997, the Company had $2,771,492 outstanding under its bank 
credit facilities consisting of a $1 million revolving line of credit 
and a $1,771,492 term loan. The term loan bears interest at 8.63% and 
calls for equal monthly installments over a 7-year period. The revolving 
line of credit expired on December 31, 1996 and remains unpaid. Under 
the credit facilities, Nor'Wester must (I) maintain certain financial 
ratios, (ii) not incur further debt or create or assume any other lien 
on its property without the bank's prior approval, and (iii) make no 
payment dividends without the bank's prior approval. Nor'Wester is in 
violation of items (I) and (ii). The bank has notified Nor'Wester that 
the $2.0 million term loan will become due and payable immediately 
unless an acceptable amendment to the bank's loan agreements is 
executed.  Nor'Wester is involved in discussions with the bank in order 
to (I) extend the $1.0 million credit facility to mature on the earlier 
of September 30, 1997 or 10 days following closing of the investment by 
UBA, (ii) renew the term loan and (iii) waive the loan covenants 
associated with these loans so long as Nor'Wester remains in compliance 
with all terms of the Investment Agreement and achieves reasonable 
progress toward closing the investment with UBA. However, final approval 
of the amendment to the bank's loan agreements has not yet been received 
and the bank has notified the Company that all amounts owed under the 
credit facilities are currently due.

Nor'Wester's management believes that current working capital together 
with projected income from operations is not sufficient to meet 
Nor'Wester's cash needs through the end of 1997. Nor'Wester's 
independent accountants expressed substantial doubt as to Nor'Wester's 
ability to continue as a going concern in their report on Nor'Wester's 
1996 consolidated financial statements.

To address recent losses and the need for working capital, Nor'Wester 
has developed and are in the process of implementing plans designed to 
sustain operations until profitability is reached. In particular, 
Nor'Wester has taken steps to: (i) implement a more focused marketing 
and sales plan designed to increase sales on a regional basis; (ii) 
significantly reduce or eliminate cooperative brewing arrangements with 
affiliates which proved to be inefficient and costly; (iii) negotiate 
with past-due creditors for extended terms and payment plans and to 
allow for the possibility of obtaining debt financing; (iv) hire and 
retain highly qualified employees familiar with the brewing industry; 
(v) use bridge loans from UBA to fund operations until the Investment 
closes; and (vi) sell duplicate and/or under utilized assets created by 
the Consolidation for cash. 

While management believes these plans will sustain Nor'Wester's 
operations through June 30, 1998, no assurance can be given that these 
plans will provide the necessary revenue and profits to sustain 
operations through that period.  Nor'Wester is highly dependent upon the 
receipt of additional amounts from UBA under the bridge loan and closing 
of the Investment.  No assurance can be given that the Investment will 
close.  If, for any reason, the Investment does not occur, alternative 
sources of debt financing and/or equity capital would have to be 
developed. There can be no assurance that such debt financing or capital 
will be available or, if available, under terms and conditions 
acceptable to Nor'Wester. Nor'Wester's inability to obtain additional 
capital would result in a material adverse effect on Nor'Wester's 
business and results of operations. 

Furthermore, assuming the Investment closes, UCB will be dependent upon 
the receipt of additional debt or equity financing to sustain operations 
of the Company until revenues are sufficiently increased and costs 
controlled to enable them to achieve positive cash flow and 
profitability. No assurance can be given that additional debt or equity 
financing will be available on terms acceptable to UCB or at all. 
Failure to obtain additional financing would have a material adverse 
effect on the operations and financial condition of the Company.


PART II.  OTHER INFORMATION

Item 3. Defaults Upon Senior Securities

The Company had a $1,000,000 revolving bank line of credit which expired 
on December 31, 1996.  The line is secured by the Company's assets, and 
contains certain covenants and restrictions.  At June 30, 1997 
$1,000,000 was outstanding under this line of credit. 

The Company has a $1,771,492 term loan with the same financial 
institution.  At June 30,1997, $1,771,492 was borrowed under this 
facility, which is secured by certain assets of the Company.

Under the credit facilities, Nor'Wester must (i) maintain certain 
financial ratios, (ii) not incur further debt or create or assume any 
other lien on its property without the bank's prior approval, and (iii) 
make no payment dividends without the bank's prior approval. Nor'Wester 
is in violation of items (i) and (ii). The bank has notified Nor'Wester 
that the $2.0 million term loan will become due and payable immediately 
unless an acceptable amendment to the bank's loan agreements is 
executed.  Nor'Wester is involved in discussions with the bank in order 
to (i) extend the $1.0 million credit facility to mature on the earlier 
of September 30, 1997 or 10 days following closing of the investment by 
UBA, (ii) renew the term loan and (iii) waive the loan covenants 
associated with these loans so long as Nor'Wester remains in compliance 
with all terms of the Investment Agreement and achieves reasonable 
progress toward closing the investment with UBA. However, final approval 
of the amendment to the bank's loan agreements has not yet been received 
and the bank has notified the Company that all amounts owed under the 
credit facilities are currently due.

Item 6. Exhibits and Reports on Form 8-K.

   (a) Exhibits: None.

   (b) No reports were filed on Form 8-K during the quarter 
which this report is filed.


                            SIGNATURES


Pursuant to the requirements of the Security Exchange Act of 
1934, the Registrant has duly caused this report to be 
signed on its behalf by the undersigned thereunto duly 
authorized.


Nor'Wester Brewing Company, Inc,



Date:   August 14, 1997  By _____________________
                            Jim Bernau
                            President



SIGNATURES


Pursuant to the requirements of the Security Exchange Act of 
1934, the Registrant has duly caused this report to be 
signed on its behalf by the undersigned thereunto duly 
authorized.


Nor'Wester Brewing Company, Inc.




Date:  August 14, 1997     By /s/ Jim Bernau
                        Jim Bernau
                        President