UNITED STATES                               
                 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 March 31, 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, Oregon 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 March 
31, 1997: 3,711,097 shares, no par value.



                       NOR'WESTER BREWING COMPANY, INC.

                             INDEX TO FORM 10-QSB


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 three months ended March 31, 1997 are not necessarily 
indicative of results to be expected for the entire year.

   Item 1 - Consolidated Financial Statements

      Consolidated Balance Sheet March 31, 1997 and December 31, 1996

      Consolidated Statement of Operations -  Three Months Ended
       March 31, 1997 and 1996

      Consolidated Statement of Cash Flows -  Three Months Ended
       March 31, 1997 and 1996

      Notes to Consolidated Financial Statements

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

Part II - Other Information

   Item 3 -- Defaults Upon Senior Securities
   Item 6 -- Exhibits and Reports on Form 8-K


Signatures


Item 1 - Consolidated Financial Statements


                     NOR'WESTER BREWING COMPANY, INC.
                        Consolidated Balance Sheet

                                            March 31,
                                              1997       December 31,
ASSETS                                     (unaudited)       1996
Current assets:                           -----------    -----------
   Cash and cash equivalents                 $80,543       $252,049 
   Accounts receivable                       592,813        606,642 
   Income tax receivable                     103,761        103,761 
   Receivable from affiliated companies    1,928,984      1,798,350
   Inventories                               830,902        720,507 
   Marketing supplies                         77,982         77,530 
   Other current assets, net                 336,912        221,223 
                                           ---------      ---------
   Total current assets                    3,951,897      3,780,062 

Property and equipment, net               11,787,919     11,968,471 
Other non-current assets, net                 65,000         40,000 
                                          ----------     ----------
Total assets                             $15,804,816    $15,788,533 
                                          ==========     ==========
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Line of credit                         $1,041,000     $1,041,000 
   Current portion of long-term debt
     and capital lease                     1,939,289        285,318 
   Notes payable                           1,750,000      1,150,000  
   Accounts payable                        2,356,868      2,427,073 
   Container deposits                        127,396        130,921 
   Accrued payroll and other
     liabilities                             223,266        309,256 
                                           ---------      ---------
   Total current liabilities               7,437,819      5,343,568 

Long-term debt and capital lease              10,825      1,664,796 
                                           ---------      ---------
   Total liabilities                       7,448,644      7,008,364 

Shareholders' equity:
   Preferred stock, 15,000,000 shares
    authorized in 1996, no shares
    issued and outstanding                         -              -
   Common stock, no par value - 10,000,000
    shares authorized, 3,711,097 shares 
    outstanding                           11,064,480     11,064,480 

Accumulated deficit                       (2,708,308)    (2,284,311)
                                           ---------      ---------
Total shareholders' equity                 8,356,172      8,780,169 
                                           ---------      ---------
Total liabilities and 
   shareholders' equity                  $15,804,816    $15,788,533 
                                          ==========     ==========




                       NOR'WESTER BREWING COMPANY, INC.

                    Consolidated Statement of Operations
                                 (unaudited)



                                          Three Months Ended March 31,
                                             1997              1996
                                          ----------        ----------
Gross sales                               $1,317,212        $1,554,845 
Less: excise taxes                           (63,365)          (75,059)
                                           ---------         ---------
Net sales                                  1,253,847         1,479,786 

Cost of sales                                980,409           968,267 
                                           ---------         ---------
Gross profit                                 273,438           511,519 

Selling, general and administrative 
  expenses                                   578,838           475,471
                                           ---------         ---------
Income (loss) from operations               (305,400)           36,048

Interest and other income, net              (118,597)           38,321 
                                           ---------         ---------
Income (loss) before income taxes and 
   minority interest                        (423,997)           74,369 

Provision for income taxes	                        -           (29,004)
                                           ---------         ---------    
Income (loss) before minority interest      (423,997)           45,365 

Minority interest                                  -            17,692 
                                           ---------         ---------
Net income (loss)                          $(423,997)          $63,057 
                                           =========         =========
Net income (loss) per common share            $(0.11)            $0.02 
                                           =========         =========
Weighted average number of
common shares outstanding                  3,711,097         3,651,554
                                           ----------        ---------




                      NOR'WESTER BREWING COMPANY, INC.

                   Consolidated Statement of Cash Flows
                               (unaudited)

                                          Three Months Ended March 31,
                                               1997           1996
Cash flows from operating                  ----------      ----------
activities:
   Net income (loss)                       $(423,997)        $63,057
   Minority interest in loss from
     joint venture                                 -         (17,692)
   Reconciliation of net income to net
     cash provided by operating activities:
     Depreciation and amortization           209,707          67,742
     Changes in assets and liabilities:
       Accounts receivable                    13,829        (126,284)
      Inventories                           (110,395)         14,732 
      Other current assets                  (116,141)        239,957 
      Other non-current assets               (25,000)        102,521 
      Accounts payable                       (70,205)       (391,715)
      Accrued liabilities and container
        deposits                             (89,515)       (259,992)
                                           ---------        --------
   Net cash used for operating activities   (611,717)       (307,674)

Cash flows from investing activities
   Advances to affiliated companies         (130,634)       (218,966)
   Purchases of property and equipment       (29,155)       (928,938)
                                           ---------       ---------
   Net cash used for investing activities   (159,789)     (1,147,904)

Cash flows from financing activities:
   Payments on line of credit                      -        (500,000)
   Increase in borrowings                    600,000         231,282 
   Net proceeds from stock offering                -       7,689,840 
                                           ---------       ---------
Net cash provided by financing activities    600,000       7,421,122 
                                           ---------       ---------
Net increase (decrease) in cash and
  cash equivalents                          (171,506)      5,965,544 

Cash and cash equivalents:
   Beginning of period                       252,049         276,807 
                                           ---------       ---------
   End of period                             $80,543      $6,242,351 
                                           =========       =========



                       NOR'WESTER BREWING COMPANY, INC.

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                (Unaudited)

BASIS OF PRESENTATION

The Company's consolidated 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 for the year ended December 31, 1996.

The Company has recorded significant losses in the  quarter ended March 31, 
1997 and during the prior year, has negative working capital of 
$3.5 million, is not in compliance with certain debt covenants containde in 
its bank loan agreement, and has limited access to capital with which 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 others, raise substantial doubt as to its ability to continue 
as a going concern.  During the quarter ended March 31, 1997 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 Pending Consolidation note below.

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.

During the quarter ended March 31, 1996 the North Country Brewing Company, 
Inc. ("NCBCI") entered into a joint venture agreement with the Company 
relating to the ownership and operation of a brewery in Saratoga Springs New 
York.  NCBCI financed its minority interest in the joint venture with a 
short-term note payable, in the amount of $2,550,000, to the joint venture.  
NCBCI has failed to make payment on the note and its interest in the joint 
venture has been terminated.  This non-cash transaction has been excluded 
from the accompanying statement of cash flows. 

Inventories

Inventories consist of the following:
                                        March 31,      December 31,
                                          1997             1996    
                                    -------------      ------------
Beer-making and packaging materials  $    520,806       $   460,423
Work-in-process                            74,933            75,553
Finished goods                            235,163           184,531
                                    -------------      ------------
                                     $    830,902       $   720,507


                      NOR'WESTER BREWING COMPANY, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                               (Unaudited)


Property and Equipment

Property and Equipment consists of the following:

                                          March 31,      December 31,
                                            1997              1996   
                                       --------------    -------------
Land and improvements                   $     243,072     $    243,071
Leasehold improvements                      2,359,098        2,338,391
Equipment                                  10,004,764        9,612,828
Construction in progress                      164,303          547,792
                                       --------------    -------------
                                           12,771,237       12,742,082
Less accumulated depreciation                (983,318)        (773,611)
                                       --------------   -------------- 
                                        $  11,787,919   $   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 shares 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 
$7,963,000, 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 during the three 
month periods ended March 31, 1997 and 1996. Outstanding options to purchase 
shares of the Company's common shares have not been included in the 
calculation for the quarter ended March 31, 1997 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 thebank's reference rate plus 0.5% (8.75% at March 31, 1997) which expired
on December 31, 1996.  The line is secured by the Company's assets, and 
contains certain covenants and restrictions (see Pending Consolidation note) 
At March 31, 1997 $1,000,000 was outstanding under this line of credit.

In addition, the Company's North Country subsidiary had $41,000 outstanding on
a separate line of credit bearing interest at 9.75% at March 31, 1997

The Company has a $250,000 loan payable to its president, bearing interest at
10%.  Repayment of the loan is required upon completion of the proposed 
merger with UBA (see Pending Consolidation note).

The Company has a $1.5 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 March 31, 1997 (see Pending Consolidation note).

The Company has a $1,842,351 bank term loan which bears interest at the bank's 
reference rate plus 0.5% (8.63% at March 31, 1997) and is payable in equal 
monthly installments over seven years.  At March 31, 1997, $1,842,351 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 March 31, 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 Pending Consolidation 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.  Subsequent to March 31, 1997, 
the bank notified the Company that the non-revolving credit 
facility would also be due on September 30, 1997.  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 March 31, 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 through March 31, 1997.  During the quarter ended March 
31, 1997, options for 140,000 shares of the Company's common stock were issued 
with an exercise price of $3.25 per share.  In addition, during the quarter 
ended March 31, 1997, the Company adjusted the exercise price to $3.25 for 
all previously issued and outstanding options with an exercise price in 
excess of $3.25.  Subsequent to March 31, 1997 the company repriced all 
outstanding options to $1.75.  A total of 126,539 options were re-priced.

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 Pending Consolidation note.  The options will be converted at 
the same conversion rate as the conversion of common stock discussed in the 
Pending Consolidation note.


Income Taxes
No benefit for income taxes was recognized for the quarters ended March 31, 
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 March 31, 1997, the Company had a net operating loss carryforward 
aggregating approximately $4.6 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 Pending Consolidation note ) or fails 
to meet continuity of business requirements defined by the Internal Revenue 
Code.  The Company's net operating loss carryforwards begin expiring in 2013.

Related Parties

Nature of related parties
The Company's president partially owns and controls Willamette Valley 
Vineyards (WVV), a winery in Oregon, and Willamette Valley Inc. 
Microbreweries across America (WVI), a company organized to establish 
microbreweries throughout the United States.  Additionally, the Company's 
president , Jim Bernau, is the president of each of the following 
subsidiaries of WVI:  Aviatior 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 the Company president'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 Company president's time.

Related party transactions
For the three months ended March 31,1996, 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 March 31, 1997, the Company performed these services internally.

For the three months ended March 31, 1996, the Company purchased stock and 
sales support services from an affiliated company, Willamette Valley 
Vineyards, Inc., for $3,600. For the three months ended March 31, 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 $48,567 for such 
services for the three months ended March 31, 1997 and $60,075 for the three 
months ended March 31, 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 productsinto 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, dut 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 Pending Consolidation 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 March 31, 1997 these advances remain outstanding.  Because 
management expects these advances will eventually be eliminated when the 
proposed merger occurs, as discussed in the Pending Consolidation note, 
these advances have been classified as current receivables from affiliates at 
March 31, 1997.

Joint Venture Agreement and Principles of Consolidation 
In 1996, the Company entered into a joint venture agreement with 
NCBI for the pupose 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 March 31, 1997, no minority interest is 
recorded in the accompanying balance sheet or statement of operations.  
The Saratoga Springs brewery makes up approximately 57% of the Company's net 
fixed assets.

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 $1.9 million.  Because these receivables are expected 
to be eliminated or received in cash after the proposed merger with UBA 
occurs (see Pending Consolidation note), these receivables have been 
classified as current at March 31, 1997.  Receivables from each of the 
affiliated companies are as follows:

     WVV  $   21,093
     WVI     379,275
     AAI     629,857
     MHB     735,134
     BAI      67,497
     NCBI     96,128
          ----------
          $1,928,984


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 March 31, 1997, and the remainder are expected to be 
eliminated when the companies are merged into the new company expected to be 
formed (see Pending Consolidation note).

Commitments and Contingencies

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.  This payment was capitalized and is being 
amortized over a period of five years.

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

Pending Consolidation, Bridge Loan, Subsequent Investment By UBA(Private)

The Company, WVI, AAI, MHB and BAI (together the "Affiliated Companies") 
have entered into an Investment Agreement with United Breweries of America, 
Inc. ("UBA") dated January 30, 1997 (the "Investment Agreement").  Under 
the Investment Agreement, UBA is obligated toprovide Nor'Wester with up to 
$2.75 million in bridge loans as interim financing during the consolidation 
phase.  Advances under the bridge loan areexpected to be used by Nor'Wester 
to help cover operating expenses and pay existing creditors of the Affiliated 
Companies until closing of the investment, at which time the balance of UBA's 
$5.5 million investment is expected to be made.  Of the $2.75 million, $1.5 
million has already been advanced and spent as of the date of this report.  


Item 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
          RESULTS OF OPERATIONS



            NOR'WESTER 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 and from time to
time in Nor'Wester's Securites and Exchange Commisstion filings and reports.  
In addition,such statements could be affected by general industry and market 
conditions and growth rates, and general domestic economic conditions.  

Consolidated Results of Operations

Nor'Wester's Saratoga Springs Brewery (North Country Brewing) began producing
and selling beer in October 1996.  Therefore, the Company's consolidated 
results of operations for the quarter ended March 31, 1997 include those of 
North Country Brewing while the results for the quarter ended March 31, 1996 
do not.

Gross Revenues.  
Gross revenues from beer, pub and retail products totaled $1,317,212 for the 
quarter ended March 31, 1997 and $1,554,845 for the quarter ended March 31, 
1996.  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 
certainmajor national brewers.  North Country Brewery's gross revenues 
represented  $497,307 of consolidated gross revenues for the quarter ended 
March 31, 1997.

Nor'Wester's Portland Brewery currently has an annual production capacity of 
41,000 barrels.  Nor'Wester sold 4,480 barrels and 7,966 barrels during the 
quarter ended March 31, 1997 and 1996 respectively.

Nor'Wester's Saratoga Springs Brewery currently has an annual production 
capacity of 30,000 barrels and sold 2,724 and 0 barrels during the 
quarter ended March 31, 1997 and 1996, respectively.

Excise Taxes
Excise taxes decreased to $63,365 (4.8 % of gross revenues) for the quarter 
ended March 31, 1997 from $75,059 (4.8 % of gross revenues) for the quarter 
ended March 31, 1996.  The decrease in excise taxes is the result of the 
decreasd gross sales on which the taxes are assessed.

Cost of Goods Sold.
Cost of goods sold totaled $980,409 (78 % of net revenues) for the quarter 
ended March 31, 1997 compared to $968,267 (65 % of net revenues) for the 
quarter ended March 31, 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 $578,838
(46 % of net revenues) for the quarter ended March 31, 1997 from $475,471 
(32 % of net revenues) for the quarter ended March 31, 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 Income (Loss). 
As a result of the individual line items discussed above, net loss was 
$423,997 for the quarter ended March 31, 1997 compared to net income of 
$63,057 for the quarter ended March 31, 1996.

Liquidity and Capital Resources

Cash and cash equivalents decreased $171,506 to $80,543 for the quarter ended 
March 31, 1997 primarily due to operating losses incurred during the quarter.  
Uses of funds included an increase in inventory of $110,395, an increase in 
other current assets (mostly marketing and point of sale materials) of 
$116,141, and increases in receivables to affiliates of $130,634.  Bridge 
loans provided by UBA of $600,000 was the primary source of funds.

The Company's working capital deficit was $3,485,922 at March 31, 1997, 
compared to working capital of $10.4 million at March 31, 1996.  The decrease
in working capital reflects the use of funds generated from the Company's 
initial public offering in January 1996 to support the Company's operations, 
provide capital to build the Saratoga Springs facility, and fund efforts to 
expand its markets nationally.  

Accounts payable at March 31, 1997 totaled $2,365,868 compared to $2,427,073 
at December 31, 1996, and $479,000 at March 31, 1996.  Of the $2,365,868 
at March 31, 1997 $2,093,991 was past due.  

At March 31, 1997 and December 31, 1996, the Company had outstanding $2,842,351 
million under its bank credit facilities consisting of a $1 million revolving 
line of credit and a $1,842,351 non-revolving credit facility.  The 
non-revolvingloan 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 of dividends without the bank's 
prior approval.  Nor'Wester is in violation of items (i) and (ii).  
Nor'Wester is involved in discussions with the lender in order to (i) renew 
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 and (ii) 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.  Subsequent to March 31, 1997,
the bank notified the Company that the non-revolving credit facility would also
be due on September 30, 1997.

In 1996, Nor'Wester utilized capital primarily to finance the construction 
and start-up of the Saratoga Springs Brewery and increases in brewing 
capacity to its existing facilities.  In addition, Nor'Wester required 
capital to finance operations and continues to require capital for ongoing 
operations.  The recently completed construction and start-up of the Saratoga
Springs Brewery and Nor'Wester's attempts to regain market share in the 
Portland area for its Nor'Wester branded products has had and is expected to 
continue to have a material impact on Nor'Wester's assets, liabilities, 
capital expenditure commitments, and liquidity.
  
The Company's management believes that projected income from operations is 
not sufficient to meet the Company's cash needs over the next twelve months. 
The Company's independent accountants expressed substantial doubt as to the 
Company's ability to continue as a going concern in their report on the 
Company's 1996 consolidated financial statements.

DEPENDENCE UPON BRIDGE LOANS AND INVESTMENT FROM UNITED BREWERIES OF AMERICA, 
INC.  The Company has been and continues to be highly dependent upon the 
receipt of bridge loans and investment funds from UBA to pay creditors and 
sustain the Company's operations during the expected periods of loss until 
profitability is restored.  Since October 1996 through the date of this 
report, UBA has provided $1.9 million in bridge loans under the $2.75 million 
credit facility.  The receipt of additional advances under the credit facility 
and closing of the investment is subject to the Affiliated Companies' 
compliance with certain covenants and conditions set forth in the Investment 
Agreement and credit documents, including the condition that no "material 
adverse effect" occurs in the businesses of the Affiliated Companies as a 
whole.  While the Company is dependent upon the receipt of further bridge and 
closing of the UBA investment, the Company does not control the business or 
operations of the other Affiliated Companies and can not assure that it or 
another Affiliated Company will not violate one or more covenants in the 
Investment Agreement or that a closing condition will not be met.  
Accordingly, there can be no assurance that the Company will receive further 
bridge loan amounts or that the investment will ultimately close or will close 
on the terms set forth in the Investment Agreement. See footnotes to 
consolidated financial statements -- Pending Consolidation.

If for any reason, the Company is unable to pay past due creditors and finance 
working capital requirements through an investment by UBA, alternative methods 
of financing would have to be obtained.  No assurance can be given that 
alternative methods of financing would be obtained.  No assurance can be given 
that alternative methods of financing would be available on terms acceptable 
to the Company, or at all.  Having to develop alternative means of financing 
would likely slow development of the existing breweries and such alternative 
financing may be costly.  The inability of the Company to obtain additional 
capital would adversely affect the Company's business and results of 
operations.

AMOUNTS PAST DUE TO CONTRACTORS, SUPPLIERS AND EQUIPMENT VENDORS.  At March 
31, 1997 and as of the date of this report, the Company was past due on $1.9 
million and $2.1, respectively, of its accounts payable.  The Company has 
communicated with these creditors and has negotiated acceptable payment terms 
to be funded primarily through bridge loans from UBA.  If the Company does not 
have the cash needed to pay the amounts due and is not able to work out 
satisfactory alternative payment arrangements, these contractors, suppliers 
and vendors may seek to exercise their remedies, including the filing of liens 
against the Company's assets.  As of the date of this report, management is 
aware of three creditors who have filed liens to secure an aggregate of 
$414,103 owed.  Resolving the Company's payment obligations to its contractors, 
suppliers and vendors may distract Management from its other duties, involve 
additional expense, and result in production delays which in turn could have 
a material adverse impact on the Company's business, financial condition, and 
results of operations.




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 March 31, 1997 $1,000,000 was 
outstanding under this line of credit.

The Company has a $1,842,351 term loan with the same financial 
institution.  At March 31, 1997, $1,842,351 was borrowed under this facility.
This 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 March 31, 1997, the Company was not in compliance with certain loan 
covenants relating to both the term loan 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, 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.  Subsequent to March 31, 1997, the bank notified the 
Company that the non-revolving credit facility would also be due on September
30, 1997.  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.  Subsequent to March 31, 1997 
the bank notified the Company that the non-revolving credit facility would also 
be due on September 30, 1997.


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

 (a) Exhibit 1 - Definitive Investment Agreement press release dated January 
     30, 1997.

 (b) Reports on Form 8-K:

On January 30, 1997, the Company filed a Form 8-K in connection with its 
executionof a definitive investment agreement with United Breweries of 
America, Inc., an affiliate of the UB Group of Bangalore, India.  Under terms
of the agreement, UBA will invest approximately $9 million in cash in 
exchange for a 45% equity interest in a new entity comprised of the 
consolidated businesses of Nor'Wester, North Country Brewing Company, LLC., 
Willamette Valley, Inc., Microbreweries across America and its affiliates - 
Aviator Ales, Inc., Bayhawk Ales, Inc., Mile High Brewing Company, Inc.  The 
Form 8-K set forth the terms and conditions of the proposed investment as 
outlined in the letter of intent ,and included as exhibits copies of the 
letter of intent dated September 26, 1996, and a January 30, 1997 press 
release relating to the matter.

Exhibit 1


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:  May 15, 1997    By _________________________
                             James W. 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: May 15, 1997 by /s/ James W. Bernau
                          James W. Bernau
                          President