UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549


                                  FORM 10-KSB
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

                    For the Fiscal Year Ended June 30, 2000

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

        For the transition period from __________ to __________ .

                        Commission File Number: 0-30002

                            RAVENSWOOD WINERY, INC.
           (Exact name of small business as specified in its charter)

<TABLE>
<CAPTION>
<S>                                                             <C>
                      California                                             94-3026706
(State or other jurisdiction incorporation or organization)     (I.R.S. Employer Identification No.)


                   18701 Gehricke Road                                         95476
                   Sonoma, California                                       (Zip Code)
         (Address of principal executive offices)

</TABLE>

Registrant's telephone number, including area code: (707) 938-1960

Securities registered pursuant to Section 12(b) of the Act:

Title  of  each  class               Title of each exchange on which  registered
----------------------               -------------------------------------------

                                     None

Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, no par value

     Check  whether the issuer (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. Yes [X]  No [ ].

     Check   if  disclosure  of  delinquent  filers  pursuant  to  Item  405  of
Regulation  S-K  (section  229.405 of this chapter) is not contained herein, and
no  disclosure  will  be  contained,  to  the best of registrant's knowledge, in
definitive  proxy  or  information  statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-KSB. [ ].

     The issuer's revenues for its most recent fiscal year. $35,615,207.

     The  aggregate  market  value of voting stock held by non-affiliates of the
issuer as of September 11, 2000 was $39,475,248.

     There  were 4,858,929 shares of the issuer's Common Stock outstanding as of
September 11, 2000.


                      DOCUMENTS INCORPORATED BY REFERENCE

Items  10  through  13  are  incorporated  by  reference  to  the issuer's Proxy
Statement  for  the 2000 annual meeting of shareholders to be filed with the SEC
and mailed to shareholders by October 6, 2000.

Transitional Small Business Disclosure Format (check one): Yes [ ]  No [X].


<PAGE>

                            RAVENSWOOD WINERY, INC.

                               TABLE OF CONTENTS

                                2000 FORM 10-KSB



<TABLE>
<CAPTION>
Item No.                                                                                         Page
--------                                                                                         ----
<S>          <C>                                                                                <C>
                                                  PART I
Item 1.      Business .......................................................................     1
Item 2.      Properties .....................................................................    15
Item 3.      Legal Proceedings ..............................................................    16
Item 4.      Submission of Matters to a Vote of Security Holders ............................    16

                                                 PART II
Item 5.      Market for the Registrant's Common Stock and Related Shareholder Matters .......    17
Item 6.      Management's Discussion and Analysis of Financial Condition and Results of
             Operations .....................................................................    18
Item 7.      Financial Statements ...........................................................    23
Item 8.      Changes In and Disagreements With Accountants on Accounting and Financial
             Disclosure .....................................................................    43

                                                 PART III
Item 9.      Directors, Executive Officers, Promoters and Control Persons; Compliance with
             Section 16(a) of the Exchange Act ..............................................    43
Item 10.     Executive Compensation .........................................................    43
Item 11.     Security Ownership of Certain Beneficial Owners and Management .................    43
Item 12.     Certain Relationships and Related Transactions .................................    43
Item 13.     Exhibits, Financial Statement Schedules and Reports on Form 8-K ................    43
</TABLE>

     This  Report  contains  forward-looking  statements  within  the meaning of
Section  27A  of  the Securities Act of 1933, as amended (the "Securities Act"),
and  Section  21E  of  the  Securities  Exchange  Act  of  1934, as amended (the
"Exchange   Act"),   regarding   future   events   and  Ravenswood's  plans  and
expectations  that  involve  risks  and uncertainties. When used in this Report,
the  words  "estimate,"  "project,"  "intend,"  "expect"  and  "anticipate"  and
similar  expressions  are  intended to identify such forward-looking statements.
Such  statements are subject to certain risks and uncertainties, including those
discussed  below,  that  could  cause  actual  results to differ materially from
those  projected. Factors that may cause actual results to vary include, but are
not  limited  to:  (i)  future  and  past weather and general farming conditions
affecting  the  annual  grape  harvest;  (ii)  variations  in consumer taste and
preference:  (iii) changes in the wine industry regulatory environment; and (iv)
changes  in  the  market  value of Ravenswood's common stock. Other factors that
may  cause  or  contribute  to such differences include, but are not limited to,
those  discussed  below  under  "Risk  Factors,"  as  well  as  those  discussed
elsewhere  in this Report and in the documents incorporated herein by reference.
In  light of the important factors that can materially affect results, including
those  set  forth  in this paragraph and below, the inclusion of forward-looking
information  herein  should not be regarded as a representation by Ravenswood or
any  other  person that the objectives or plans for Ravenswood will be achieved.
The   reader  is  therefore  cautioned  not  to  place  undue  reliance  on  the
forward-looking  statements  contained  herein,  which speak only as of the date
hereof.  Ravenswood  undertakes  no  obligation  to  publicly release updates or
revisions to these statements.


<PAGE>

                                    PART I


Item 1. Business


General Overview

     Ravenswood   produces,   markets   and   sells   premium  California  wines
exclusively  under  the  Ravenswood  brand  name. The vast majority of the wines
Ravenswood  produces  and  sells  are  red  wines,  including  Merlot,  Cabernet
Sauvignon  and, particularly, Zinfandel. To a lesser extent, Ravenswood produces
white wines, including Chardonnay, French Colombard and Gewurztraminer.

    Ravenswood produces wines in three series:

   * The  value-priced  Vintners  Blend Series, with a suggested retail price of
     approximately $9.75 to $11.25 per 750 ml bottle;

   * The  intermediate-priced  County  Series,  with a suggested retail price of
     approximately $13.25 to $18.50 per 750 ml bottle; and

   * The  higher-priced  Vineyard  Designate  Series,  with  a  suggested retail
     price of approximately $22.00 to $35.00 per 750 ml bottle.

     The  actual price of any particular wine may be either higher or lower than
suggested  retail,  depending  upon the type of retail outlet and location where
it   is   sold.   All  of  these  products  are  within  the  super-premium  and
ultra-premium  categories of the premium wine market generally recognized by the
wine  industry.  "Premium" wines typically retail for more than $3.00 per 750 ml
equivalent  unit.  The  premium  category  is  often  divided  into  three major
segments:  (a) "popular premium" wines, which retail for between $3.00 and $7.00
per  750 ml equivalent unit; (b) "super-premium" wines, which retail for between
$7.00  and  $14.00  per  750  ml equivalent unit; and (c) "ultra-premium" wines,
which  retail  for  $14.00  or more per 750 ml equivalent unit. These categories
were  originally  created  by  Gomberg,  Fredrickson  and Associates and are now
commonly used in the wine industry.

     For  its  1998  and  1999  vintages,  which  the  Company released in 2000,
Ravenswood  marketed  and  sold  39  different  wines  within  its three product
series.

     Ravenswood's   approach   focuses  on  using  old-world  French  winemaking
techniques  to  produce  premium  wines  of  exceptional quality and on building
awareness  and  loyalty  for  the Ravenswood brand. Ravenswood has traditionally
concentrated  investment  in  developing  its brand name, building inventory and
expanding  distribution  channels,  rather  than  developing  vineyard holdings.
Although  Ravenswood  currently  owns and manages 14 acres of planted vineyards,
over  95% of its grapes are supplied by third parties. Ravenswood also purchases
bulk  wine  of  superior  quality,  which  is  incorporated  into  its products,
particularly its Vintners Blend Series.

     Ravenswood  believes  this  strategy  has  enabled it to sustain the growth
necessary  to  capitalize  on  favorable  trends  in  the  demand for California
premium  wines,  while minimizing the need to invest large amounts of capital in
the  acquisition  and  development  of  land  and  capital  equipment  until its
production  levels  warranted  further investment. As a result Ravenswood enjoys
returns on equity and assets that are above normal for the wine industry.


Ravenswood Products

     Ravenswood  has focused on the production of wines within the super-premium
and  ultra-premium  categories  of  the  premium wine market. Ravenswood's wines
target specific varietals, appellations and prices within these categories.


Vintners  Blend  Series  Ravenswood's  Vintners  Blend Series  consists of wines
                         produced  from grapes of specific varietals but sourced
                         from  a  variety of geographic locations in California.
                         Ravenswood  purchases  grapes  from independent growers
                         in    premium   grape-growing   regions   in   Northern
                         California.  These  grapes  are  vinified by Ravenswood
                         and blended with bulk wine


                                       1


<PAGE>

                         derived  from  grapes  grown in California to produce a
                         wine  of  distinct  varietal  character at a reasonable
                         price  to  the  consumer. Ravenswood currently produces
                         Vintners  Blend  Zinfandel,  Merlot  and Chardonnay, as
                         well  as  other  white  wines in a similar price range.
                         Because   of  its  price,  the  Vintners  Blend  Series
                         provides   lower   margins   than   Ravenswood's  other
                         products;  however, the flexibility of using grapes and
                         bulk  wine  of  varying appellations enables Ravenswood
                         to  produce its Vintners Blend Series on a larger scale
                         than  its  other  products.  As a result, Ravenswood is
                         able  to  generate  greater  sales.  In the 2000 fiscal
                         year,  gross sales of the Vintners Blend Series totaled
                         $22.4  million, or 63% of Ravenswood's gross sales, and
                         is   the   fastest   growing   series  in  Ravenswood's
                         portfolio of products.


County Series            Ravenswood's   County   Series   consists  of  specific
                         varietal  wines  vinted  primarily  by  Ravenswood  and
                         blended from grapes acquired from  independent  growers
                         within the specific appellations of Napa County, Sonoma
                         County,  Amador  County,  Mendocino  County,  Alexander
                         Valley and Lodi.  Ravenswood  believes  that its County
                         Series  provides   consumers  with  reasonably  priced,
                         ultra-premium  wines that have  distinct  varietal  and
                         geographic character and are derived solely from grapes
                         of highly regarded appellations.  For its 1998 vintage,
                         Ravenswood offered 13 different wines within the County
                         Series.  In the 2000  fiscal  year,  gross sales of the
                         County  Series   totaled  $7.8   million,   or  22%  of
                         Ravenswood's gross sales.


Vineyard Designate       Ravenswood's  Vineyard  Designate  Series  consists  of
Series                   ultra-premium  varietal and Meritage wines derived from
                         grapes supplied by specific  vineyards  within Napa and
                         Sonoma counties. Ravenswood believes that each Vineyard
                         Designate    wine    reflects    the   unique    flavor
                         characteristic  of  a  specific,  designated  vineyard.
                         Ravenswood  also believes  that its Vineyard  Designate
                         Series'   emphasis  on  old-world   French   winemaking
                         techniques  sets  a  standard  for  high  quality  that
                         enhances the perceived value of the products in each of
                         its  product  series.  For its 1998 and 1999  vintages,
                         Ravenswood   offered  20  different  wines  within  its
                         Vineyard  Designate  Series.  The  number  of  products
                         offered  within the Vineyard  Designate  Series  varies
                         from  year to year.  This  variation  results  from two
                         factors:   the  number  of  vineyards   available   for
                         designation  and  the  winemakers'   discretion  as  to
                         whether  harvested  grapes  merit  Vineyard   Designate
                         Series status.  In the 2000 fiscal year, gross sales of
                         the Vineyard Designate Series totaled $5.1 million,  or
                         14% of Ravenswood's gross sales.


                                       2


<PAGE>

<TABLE>
     The  table  below  summarizes  the  number of wines offered in each product
series, by varietal, for the Ravenswood 1998 and 1999 vintages:


<CAPTION>
                                                       Vintners                Vineyard
                                                         Blend      County     Designate     Total
                                                         -----      ------     ---------     -----
<S>                                                   <C>          <C>        <C>           <C>
Zinfandel ...........................................     1            6            9         16
Merlot ..............................................     1            2            4          7
Cabernet Sauvignon, Cabernet Franc and
 Bordeaux varietal blends ...........................     0            3            4          7
Miscellaneous reds/blends ...........................     0            1            1          2
Chardonnay ..........................................     1            0            1          2
Miscellaneous whites ................................     3            1            1          5
                                                          -           --           --         --
TOTAL ...............................................     6           13           20         39
                                                          =           ==           ==         ==
</TABLE>

     The  vast  majority  of  Ravenswood's  products are red wines, particularly
Zinfandel.  Ravenswood's  red wines accounted for approximately 94% of its gross
sales  in  the  2000  fiscal  year,  with  sales  of  Zinfandel  accounting  for
approximately  65% of its gross sales for that period. Ravenswood estimates that
future  vintages  will  continue  to  consist  primarily  of red wines. However,
Ravenswood  expects  a  lesser  percentage of Ravenswood's total production will
consist  of  Zinfandel,  as it expects production of other red varietal wines to
increase  more  rapidly. Ravenswood will continue to attempt to expand its sales
and  name  recognition  selectively. Ravenswood believes that its current mix of
products  is  well-suited  to  the  growing demand for red wines, and intends to
continue to devote a majority of its production to its existing red wines.

     Ravenswood  believes  that  by  focusing  on  traditional, old-world French
winemaking  processes and emphasizing red wine, it has achieved a reputation for
high   quality  and  distinctive  flavors  within  the  market  for  red  wines,
particularly  with  respect  to its Zinfandel and its Vineyard Designate Series.
Ravenswood  intends  to  maintain  its  position  as a prominent supplier in the
product  categories in which it has already established itself. It also plans to
explore  additional  opportunities  to  produce  alternative varietal or blended
products  in  those  areas  where its focus can enable Ravenswood to establish a
similar  reputation  for  excellence  and  build  favorable  awareness  for  the
Ravenswood brand.


Ravenswood's Winemaking Process

     In  producing  its  premium  wine  products, Ravenswood employs traditional
old-world  French winemaking techniques modified to embrace important aspects of
modern  winemaking.  Ravenswood  defines traditional old-world French winemaking
as  an  approach  that  embraces  natural  processes  and  in  which  human  and
mechanical  intervention  is  minimized.  For  example,  Ravenswood  allows wild
yeasts  to  assist  in fermentation and manually mixes its fermenting wines when
feasible.

     Ravenswood's  winemaking  techniques  demand careful attention to the wines
from the vineyard through the bottling and shipping of its finished products.

   Grape Acquisition

     Substantially  all of the grapes utilized in the production of Ravenswood's
wines  are  purchased from independent growers. Ravenswood plays an active role,
however,  in  the  management  of the grapes that it purchases by monitoring the
development  of  the crop and working directly with vineyard owners to determine
optimal  plans  for  nurturing  and harvesting grapes. Ravenswood also purchases
bulk  wine,  which  is wine vinted by third parties, to incorporate into some of
its  products.  Most  of  the  bulk wine purchased by Ravenswood is incorporated
into  its Vintners Blend Series. To a limited extent, Ravenswood may incorporate
bulk  wine that it believes to be of exceptional quality into its County Series.

   Fermentation

     After  the  grapes  are  harvested, they are immediately crushed and pumped
into  fermenting  tanks.  Using  wild,  natural  yeasts  found  on the grapes, a
combination  of  the  grapes,  juice,  seeds  and stems is left to ferment for a
period  ranging  from  one  to  four  weeks,  during which time the sugar in the
grapes is


                                       3


<PAGE>

converted  to  alcohol.  During fermentation, the grape skins are mixed with the
fermenting  juice  through  a  process  known as "punching down", which provides
maximum  contact  between  the skins and the juice, resulting in wines with full
extraction  of  color  and  flavor.  Ravenswood's  fermentation  procedures,  by
product series, are described below:


Vineyard Designate       Ravenswood's  Vineyard Designate Series is fermented in
                         open-top  redwood  fermentation  tanks of approximately
                         five- to eight-ton  capacity that permit  punching down
                         to be done by hand,  and optimize the  distribution  of
                         heat throughout the fermentation process. A majority of
                         the Vineyard  Designate Series is currently crushed and
                         fermented at the Gehricke Road Facility.


County Series            Ravenswood's  County  Series is  fermented  in a mix of
                         open-top redwood and stainless steel fermentation tanks
                         ranging in size from six to 20 tons.  A majority of the
                         County Series is currently crushed and fermented at the
                         Quarry Facility.


Vintners Blend Series    The  portion  of  Ravenswood's  Vintners  Blend  Series
                         vinted by Ravens-wood  is fermented  exclusively in 20-
                         to 60-ton stainless steel fermenting tanks.  Ravenswood
                         currently  utilizes  independent crush and fermentation
                         facilities  for  the  production  of a  portion  of the
                         Vintners Blend Series.  Ravenswood expects a portion of
                         the Vintners  Blend program to be crushed and fermented
                         at the Quarry Facility.

   Aging

     When  the  fermentation process is completed, the wine is gently pressed to
separate  the juice from the grape skins and stems. It is then stored for aging.
Ravenswood's aging procedures, by product series, are described below:

Vineyard Designate       All of Ravenswood's Vineyard Designate Series is stored
Series                   in  60-gallon  French  oak  barrels  of  various  ages.
                         Approximately  30-60% of the Vineyard  Designate Series
                         is  stored in new  barrels.  Ravenswood  believes  that
                         storage in new oak  barrels  provides  superior  flavor
                         characteristics   in   comparison   to  other   storage
                         alternatives.  The Vineyard Designate Series is aged in
                         barrels for up to two years.

County Series            Substantially  all of  Ravenswood's  County  Series  is
                         stored   in   60-gallon    French   oak   barrels   and
                         approximately  25-30% of the County Series is stored in
                         new barrels.  The County  Series is  typically  aged in
                         barrels for approximately 18 months.

Vintners Blend Series    Approximately 30% of Ravenswood's Vintners Blend Series
                         is stored in French oak barrels,  but  Ravenswood  does
                         not  typically  store  wines  in  this  series  in  new
                         barrels.   The  remaining  wine  used  to  produce  the
                         Vintners  Blend  Series is stored  in  stainless  steel
                         tanks or purchased as bulk wine from third parties. The
                         portion of the Vintners  Blend Series that is vinted by
                         Ravenswood  and stored in barrels is typically aged for
                         approximately one year.

     Most   of   Ravenswood's   wines  are  allowed  to  go  through  malolactic
fermentation,  a  secondary fermentation which adds complexity and flavor to the
wines.


                                       4


<PAGE>

  Blending and Bottling

     After  aging is completed, Ravenswood's wines are blended prior to bottling
and  sale.  Ravenswood's  blending  procedures, by product series, are described
below:


Vineyard Designate       The Vineyard  Designate  Series is produced by blending
Series                   wine  vinted  from  a  particular   vineyard  based  on
                         proportions  of  that  wine  stored  in new  and  older
                         barrels. The percentage of wine stored in new and older
                         barrels  that  are  blended  in a  particular  Vineyard
                         Designate  Series product is determined by Ravenswood's
                         winemaker.


County Series            The County Series is produced by blending  wines vinted
                         from specific appellations based on proportions of wine
                         from  particular  vineyards  and  stored in  barrels of
                         various ages. To a very limited extent,  Ravenswood may
                         incorporate  some bulk wine that it  believes  to be of
                         exceptional quality into its County Series.


Vintners Blend Series    The Vintners Blend Series is blended using a proportion
                         of French oak barreled  wine,  wine stored in stainless
                         steel  tanks and bulk wine  acquired  from  independent
                         wineries.

     After  bottling, Ravenswood's winemakers release the wines for distribution
at times they deem appropriate.

     Although  Ravenswood  currently  uses a variety of production facilities to
complete  the  production of its annual wine volume, it prescribes the processes
used  at  these  facilities  in  order to maintain consistency in the flavor and
quality  of  its  products.  Ravenswood believes this approach has enabled it to
establish  a  reputation for value at each price segment within the premium wine
market  in which Ravenswood currently competes. As Ravenswood expands production
of  its  existing  wines and adds new wines to its product portfolio, it intends
to  continue  to use these same practices to ensure the quality of its wines and
to enhance awareness of the Ravenswood brand name.


1998 Vintage

     It  would  have  been  easy  to  become disoriented in 1998. You might have
thought   that   California   was  bounded  by  the  North  Atlantic,  with  its
unpredictable  weather,  rather than the benevolent, somewhat Mediterranean-like
Pacific.  But then again, it was an El Nino year. Throughout the growing season,
weather  events  challenged  our grape growers' abilities and reduced what might
have  been  an  average  size  crop to a small crop. The wines from 1998 tend to
show  the  complexity  associated  with  this  small  crop  size and fresh fruit
qualities  with  higher  acidities found in cooler vintages. These are qualities
more  commonly  found  in the cooler, fine wine growing regions of Europe rather
than California.

     How  good  are  Ravenswood's  wines  in  1998? In the much-loved vintage of
1997,  independent wine writers gave Ravenswood's vineyard designated Zinfandels
scores  between  86  and  92.  In  1998,  the scores range from 87 to 95. Even a
consumer  advocacy  group  not  known  for wine snobbery, gave the 1998 Vintners
Blend  Zinfandel  a  "very  good"  rating  (it  was the only Zinfandel that they
reviewed  from  the  1998  vintage that received a "very good" rating). Clearly,
the  conclusion  is  that  Ravenswood  has maintained high quality standards and
that the wines are delicious. Need more be said?

     One  of  the  unique  things about being in the wine business is that (with
apologies  to Abe Lincoln) even if you can't please all of the people all of the
time,  you  can please all of the people some of the time. Since winemakers that
make  red  wine  always have two vintages in cellar, there is the opportunity to
look  ahead  to  the  vintage  still in barrel. In this case, the dark, brooding
wines  of  1999.  Bud  break  was  late, spring and early summer were cool, crop
levels  were  below  average,  the skies were clear except for a minor shower in
September,  and  harvest started three weeks later than normal. In short, we had
perfect  conditions  for  growing  highly flavorful grapes. The 1999 wines are a
fine  way  to punctuate the end of a great decade for California wines and raise
our  expectations for wines in the twenty first century. Intense, full flavored,
complex  and  most  assuredly  California-esque,  this vintage is sure to please
most of the


                                       5


<PAGE>

people,  all  of  the time. Many of the wines taste so good in barrel that there
is  the  temptation  to  rush  them to bottle. However, we must remind ourselves
that delayed gratification is both moral and good.


Marketing

     A  primary  focus  of  Ravenswood's marketing is to force an association in
the  consumer's  mind  between  the  Ravenswood  brand name and high quality and
distinctive  flavor  within  the super-premium and ultra-premium segments of the
premium   wine   market.  Ravenswood  believes  it  has  developed  a  favorable
reputation  and  strong  brand  awareness among wine consumers and resellers for
its  red  wines,  in  particular  its  Zinfandel, Merlot, Cabernet Sauvignon and
proprietary  blends.  Ravenswood has invested, and expects to continue to invest
significantly,  in  the  development of its brand name packaging and trademarks.
Ravenswood  believes that the distinctive Ravenswood name, which is derived from
a  character  in  the  opera  Lucia  di Lammermoor by Gaetano Donizetti, and its
distinctive  logo,  created  by  Berkeley  poster artist and printer David Lance
Goines,  convey  a  recognizable  and high-quality image that has contributed to
its success.

     In  addition,  Ravenswood  has  invested  substantially  in  promoting  its
trademarked   slogan,  "No  Wimpy  Wines",  which  it  believes  accurately  and
humorously  conveys its core marketing philosophy: to demystify wine and make it
intellectually  accessible  to  a  broad  range  of consumers. At the same time,
Ravenswood   believes   this  slogan,  which  Ravenswood  has  idiosyncratically
translated  into  over  a dozen languages in its promotional materials, portrays
the robust, full-bodied nature of its products, particularly its red wines.

     The  focus  of  Ravenswood's  marketing  strategy  is  to attract core wine
consumers.  Consumer  research  indicates  that  the  vast  majority of the wine
consumed  in  the  United  States is consumed by a small percentage of the adult
population.  While Ravenswood believes its promotional messages are appealing to
a  wide  audience of consumers, it also believes a marketing effort focused upon
core  wine  consumers  is  more effective than campaigns aimed at broadening the
population  of  wine  consumers  in  general.  As  a  result, Ravenswood has not
traditionally  relied  on  broad-based  advertising in the promotion of its wine
and  instead  has  relied  on  targeted  marketing  strategies aimed at the core
population of wine consumers.

     As  part  of  its targeted marketing strategy, Ravenswood has traditionally
relied  on  its management's personal involvement in the marketing of its wines.
Mr.  Foster,  Ravenswood's  chief  executive  officer,  and  Mr.  Peterson,  its
president  and  winemaker,  as  well as other employees, spend considerable time
each  year  leading tours at the Gehricke Road Facility, as well as traveling on
behalf   of   Ravenswood   throughout   the  country  to  meet  with  consumers,
distributors,  wholesalers,  restaurateurs and wine writers. Although Ravenswood
expects  to  expand its marketing efforts in the future, it anticipates that its
executive  management will continue to personally promote its products and brand
name.

     A  key element of Ravenswood's marketing is its tasting room located at its
Gehricke  Road  Facility.  The  tasting  room,  which is open seven days a week,
offers  tastings of Ravenswood's product line, Ravenswood logo merchandise and a
daily  tour  of the winery operations. The tasting room also offers barbecues on
summer  weekends,  which  encourage  visitors  to  linger over lunch. Ravenswood
believes  that  this  welcoming,  relaxed  atmosphere is an integral part of its
casual  and  approachable  style  and  assists in the development of a favorable
image for the Ravenswood brand.

     Consumer  research  also  indicates  that a majority of core wine consumers
rate  brand name familiarity as a very important attribute in selecting wine for
purchase.  Ravenswood  intends  to  continue  to  invest in the promotion of its
brand  name,  logo  and  slogan  in  the  future to increase the familiarity and
favorable impression of the Ravenswood brand.


                                       6


<PAGE>

Sales and Distribution

<TABLE>
     The  following  table  summarizes  Ravenswood's  sales  by  geographic area
during the 2000 fiscal year.

<CAPTION>
                   SUMMARY OF GROSS SALES BY GEOGRAPHIC AREA
                            For Fiscal Years Ended

                                           June 30,2000               June 30, 1999             June 30, 1998
           Geographic Area            Percent of Gross Sales     Percent of Gross Sales     Percent of Gross Sales
------------------------------------ ------------------------   ------------------------   -----------------------
<S>                                             <C>                        <C>                       <C>
California
   Chains ..........................             24%                        23%                       24%
   Restaurants .....................              6%                         7%                        7%
   General Retail ..................              7%                         9%                        9%
                                                 --                         --                        --
      Total California .............             37%                        39%                       40%
U.S., excluding California .........             51%                        48%                       45%
Export .............................              4%                         4%                        5%
Tasting Room .......................              8%                         9%                       10%
                                                 --                         --                        --
Total ..............................            100%                       100%                      100%
                                                ===                        ===                       ===
</TABLE>

     Ravenswood's wines are purchased by consumers:

     * At "on-premise" restaurants

     * At "off-premise"  retailers such  as specialty wine stores, supermarkets,
       discounters and liquor stores

     * At Ravenswood's tasting room

     * Over the internet in states where it is legal to do so

     Consumers  can  purchase Ravenswood's wines at on- and off-premise accounts
in  all  50  states  and  in over 20 foreign countries located in North America,
Europe  and  Asia.  Ravenswood's  sales  and  distribution  strategy  varies  by
geographic location.

     Within  the  United States, Ravenswood utilizes distributors in every state
except  California.  In California Ravenswood sells directly to retail accounts,
which  include  stores, restaurants and chains, with the aid of brokers. Brokers
are  used  to  assist  the  sales  effort  in  California  and  31 other states.
Ravenswood  uses  both brokers and distributors in most of the foreign countries
in which Ravenswood's wines are sold.

     Brokers  act  as  an  independent  sales  force  and receive commissions as
compensation  for their sales. Brokers do not take title to the wines they sell.
Distributors  purchase  wine  from  Ravenswood  and  sell  the wine to their own
retail accounts, such as restaurants, grocery stores and wine shops.

     Ravenswood   primarily   uses   smaller,   well-positioned   brokers   and
distributors  for  whom  Ravenswood is a key brand. Although Ravenswood has very
few  long-term  agreements  for  the  distribution  of  its products, Ravenswood
believes  that  its relationships with its existing brokers and distributors are
excellent.  Ravenswood's  executive  management  also  takes  an  active role in
assisting  brokers  and  distributors  with  sales  within California and within
major geographic markets outside California.

     In  the  2000  fiscal  year,  approximately 75% of Ravenswood's gross sales
were  made  using  brokers, with Ravenswood's most successful broker responsible
for  21% of its gross sales and its ten most successful brokers were responsible
for  69%  of its gross sales. Within California, Ravenswood currently uses seven
brokers  and  four  warehouses located throughout the state. For the 2000 fiscal
year,  approximately  45% of Ravenswood's gross sales resulted from sales within
California.  Of  this  amount, approximately 8% of gross sales were purchases by
California  and  non-California  consumers through Ravenswood's tasting room and
approximately 37% were sales to chains, restaurants and retail accounts.


                                       7


<PAGE>

     Whether  or  not  Ravenswood  uses  a broker as a sales agent, Ravenswood's
sales  outside of California generally require the use of distributors. While no
one  distributor  accounted  for more than 6% of gross sales for the 2000 fiscal
year,  its ten largest distributors accounted for approximately 23% of its gross
sales  for  that  period.  In  order  to  facilitate  broad  distribution of its
products  throughout  various  geographic  markets, Ravenswood has traditionally
allocated   its   available  production  among  its  brokers  and  distributors.
Ravenswood  believes  that  the  breadth  of  its  distribution  network,  which
accounted  for  approximately 55% (including export) of Ravenswood's gross sales
for  the  2000  fiscal  year,  ensures  that the elimination of any one specific
distribution relationship will not adversely affect out-of-state sales.

     In  April,  2000,  Ravenswood  established  a  32,000 square-foot warehouse
approximately  3  miles  from  the Gehricke Road Facility to service California,
out-of-state   and   export   customers.   Although  Ravenswood  still  utilizes
third-party  warehouses  throughout  California,  all out-of-state, export and a
majority  of  California  orders  are  shipped from this facility. Additionally,
Ravenswood   plans  to  incorporate  an  order  fulfillment  center  within  the
warehouse  to  centralize  processing  and shipping of direct sales to consumers
for internet and wine club orders.

     Beginning  in  1991,  Ravenswood  began  selling wines and some merchandise
directly  to  consumers  through the tasting room at its Gehricke Road Facility.
Ravenswood's  gross  sales  from its tasting room have grown substantially since
1992  and  represented approximately 8% of gross sales for the 2000 fiscal year.
Although  Ravenswood  sells  some  of its products through direct mail channels,
where  permitted  by  law,  it  does  not  anticipate a material increase in the
percentage  of  sales  derived  from  direct mail sales to consumers in the near
future.

     In  May  of  2000,  Ravenswood  signed an agreement with Winetasting.com to
sell  Ravenswood's  wines  through  the  Winetasting.com website. Because of the
complexity  of  laws  regulating  direct  shipments  of  alcoholic  beverages to
consumers,  Winetasting.com  has  developed  sophisticated  software  to  assist
wineries   in   complying  with  these  regulations.  Ravenswood  believes  that
Winetasting.com  has  the  expertise  and  experience  to  promote  its Internet
presence  and facilitate order processing and shipping. In July, 2000 Ravenswood
received  its  first orders through Winetasting.com and anticipates that it will
continue  to  develop  its  ability  to sell its wines over the Internet for the
foreseeable  future.  This  partnership  with  Winetasting.com  gives Ravenswood
access  to  detailed  information  regarding  Ravenswood's  customers and allows
Ravenswood  to  develop specific marketing programs to attract customers through
the Internet.


Grape and Bulk Wine Supply

     Ravenswood  obtains  its  grapes  for  wine  production  from  more than 80
suppliers  located  primarily  in  Sonoma  and Napa counties, and other Northern
California  premium  grape-growing  counties  and  is dependent upon independent
grape  growers  and bulk wine suppliers for substantially all of its annual wine
production.  Ravenswood is not dependent upon any one supplier for a significant
portion  of  its  total  required  grape  supply  in  any  given harvest season.
Ravenswood's  largest  supplier  typically  accounts  for no more than 7% of the
total  grapes  crushed for Ravenswood's annual wine production and the top three
suppliers  together  generally  account for no more than 20% of the total grapes
crushed.  Ravenswood  believes  there  are  sufficient  alternative  supplies of
high-quality  grapes  to  ensure  continuing production of high-quality wines in
the  event  that  it  cannot  obtain  grapes  from  any particular supplier. The
Gehricke  Road  Facility  includes  14  acres  of  vineyards,  5.2  of which are
producing  grapes  regularly  and  nine  of  which  were recently replanted with
Phylloxera-resistant  vines.  Ravenswood  expects  to  receive approximately ten
tons of Zinfandel from these replanted acres this Fall.

     In  working  with  its  growers,  Ravenswood  relies  on  both personal and
contractual   relationships.   Ravenswood   has   entered  into  grape  purchase
agreements  with  the  growers  of  a  majority of the grapes used in its annual
production.  The  business terms of these purchase agreements vary, however, the
majority  of  Ravenswood's  purchase agreements require that, while either party
may  terminate  the  agreement at any time, both parties must abide by its terms
for  three  years following termination. The majority of these contracts provide
for  pricing formulas tied to the Final Grape Crush Report published annually by
the California Department of Food and Agriculture.


                                       8


<PAGE>

     Ravenswood  also  purchases  grapes from some of its growers in amounts and
at   prices   that   are  negotiated  from  year  to  year.  These  year-to-year
arrangements  are  often not in writing. Ravenswood traditionally has relied on,
and  continues  to  seek  to  establish,  relationships with growers that have a
long-term  perspective,  whose  vineyards  have  the  potential  for  developing
distinctive wines, and for whom Ravenswood is an important customer.

     Ravenswood  relies  on  several  specific  grape suppliers for its Vineyard
Designate  Series  in  order to produce wines from those specific vineyards. For
the  1998  and  1999  vintages, Ravenswood produced 20 separate wines within the
Vineyard  Designate  Series.  The  vast majority of growers supplying grapes for
Ravenswood's   Vineyard   Designate   Series  have  entered  into  grape  supply
agreements  with  Ravenswood.  Ravenswood believes that the pricing arrangements
with  these  growers and the prestige and acclaim related to the production of a
wine  within  the  Vineyard  Designate  Series  have led to stable and long-term
relationships with those suppliers.

     In  the  Fall  of  1999, Ravenswood crushed approximately 4,878 tons, a 73%
increase  over  the  1998 harvest of 2,826 tons. A majority of the products from
the  1999  harvest  will be released in fiscal years 2001 and 2002. As a result,
Ravenswood  expects  to  have  an  adequate  supply of products to meet expected
demand for those years.

     Ravenswood  is  also dependent on bulk wine suppliers for the production of
several  of  its  wines, particularly its Vintners Blend Series. Ravenswood does
not  have contracts with bulk wine suppliers or agreements that would protect it
from  fluctuations  in  the price or availability of bulk wine. The availability
and  price of bulk wine significantly affect the quality and production level of
Ravenswood's  products  that contain bulk wine. The price, quality and available
quantity  of  bulk wine have fluctuated in the past and Ravenswood believes they
will continue to do so in the future.

     The  recent  increase  in  demand  for  premium  wine  has  resulted in the
planting  of  additional vineyards both domestically and internationally and the
replanting  of  existing  vineyards  to greater densities. Many industry sources
expect  a  significant increase in the supply of premium wine grapes in the next
few  years.  Although this increase in supply may cause a decrease in the prices
Ravenswood  pays  independent  growers for their grapes, an oversupply of grapes
may  significantly  increase the amount of premium wine produced. An increase in
the  supply  of  premium  wine  may reduce the price of premium wines, including
those  Ravenswood  produces.  Oversupply may also increase the amount of premium
wine  available  to  its  distributors  and retail outlets, which could increase
competition in its distribution channels.


Significant Events

     In  December  1999,  $815,000 in convertible debentures were converted into
285,250   shares   of  Ravenswood  common  stock.  Each  $10,000  debenture  was
convertible  into  3,500 shares of common stock, or $2.86 per share, at any time
prior  to  December  31, 1999 upon request of the holder. If the debentures were
not  converted,  Ravenswood  could  have redeemed them at face value at any time
during  the  period from January 1, 2000 until the maturity date of December 31,
2004.

     On  June  12,  2000  Ravenswood filed a notice of completion for its Quarry
Facility  at  26200  Arnold  Drive,  Sonoma, California. The Quarry facility was
designed   and  constructed  as  a  fully  integrated  winery  and  consists  of
approximately  47,000  square  feet capable of producing 250,000 cases annually.
Additionally,  the  facility  provides offices for administrative and production
staffs.


Management Information Systems

     Our  management  information systems integrate compliance, sales reporting,
merchandise  analysis  and stock replenishment, as well as accounting functions.
Ravenswood  believes  that  its  management  information  systems  allow  it  to
efficiently  support  Ravenswood's  growth  and  maintain a competitive industry
position.


Competition

     In  recent  months  several  major  consolidation  transactions  have  been
announced  within  the  wine industry, such as Foster's Brewing Group's proposed
acquisition of Beringer Wine Estates and Vincor


                                       9


<PAGE>

International  Inc.'s  proposed  acquisition  of  R.H  Phillips.  Although these
acquisitions,  if  consummated,  will  change the landscape within the industry,
Ravenswood  believes  that it will nevertheless remain intensely competitive and
highly  fragmented.  In addition, channels of distribution have increased access
to  wines  from  foreign sources. Ravenswood's wines compete in the premium wine
market  with  hundreds  of  other  California  wineries,  producers  of domestic
premium  wines  and  producers  of imported wines, primarily from France, Italy,
Spain,  Australia,  New Zealand, South Africa and Chile. Ravenswood's wines also
compete  with  popular-priced  generic  wines and with other alcoholic and, to a
lesser  degree, non-alcoholic beverages for shelf space in retail stores and for
marketing  focus  by  Ravenswood's independent brokers and distributors, many of
which carry extensive brand portfolios.

     Ravenswood  believes  that  the  primary  competitive  factors  in the wine
industry  tend  to be brand recognition, product quality, access to distribution
channels  and  price.  Ravenswood  believes  it  is competitive in each of these
areas,  with  high  brand recognition, exceptional products, loyal and effective
channels  of  distribution and competitive pricing policies. While consolidation
within  the wine industry will give other brands access to significantly greater
capital  resources,  more  extensive  promotional  practices,  and substantially
larger  and  more  developed  distribution networks, Ravenswood believes that it
can  compete  effectively, particularly with respect to its higher-end products,
with  much  larger-scale  wine  producers  that  rely  on larger distributors or
internal  sales  forces.  In  recent  years,  an  increasing  number  of smaller
wineries  have  adopted an approach to winemaking similar to Ravenswood's, which
emphasizes  production processes and brand awareness over investment in land and
production  capacity.  Ravenswood  believes  that  these  competitors,  such  as
Kenwood,  Rabbit Ridge, Ridge Vineyards and Rosenblum Cellars, appeal to many of
the same consumers as those targeted by Ravenswood.

     Ravenswood  believes  that  while brand awareness is an important component
to  core wine consumers, most wine consumers are loyal to more than one brand of
premium  wine.  As a result, Ravenswood must constantly promote its wines to its
existing  customer  base and expects to continue to invest in brand awareness to
reinforce its image with core wine consumers.


Trademarks

     Ravenswood  maintains  U.S. Federal trademark registrations for its brands.
Ravenswood  also  maintains  international  trademark  registrations where it is
appropriate  to  do  so.  Each  of  the United States trademark registrations is
renewable  indefinitely so long as Ravenswood is making a bona fide usage of the
trademark.


Shareholder Benefits

     Ravenswood  has  initiated  a  program  which  provides certain benefits to
holders  of  record  including:  an  opportunity to purchase wines at discounted
prices  at specific times throughout the year, invitations to special events and
VIP tours & tastings.


Employees

     As  of  June 30, 2000, Ravenswood had approximately 60 full-time employees,
30  of  whom  were  salaried,  with the remaining employees paid an hourly wage.
There were approximately 32 part-time, seasonal employees at June 30, 2000.


Executive Officers of the Company

     W.  Reed  Foster  co-founded Ravenswood in 1976. He has served as chairman,
chief  executive  officer  and  a  director  since Ravenswood's incorporation in
1986.  From 1970 until joining Ravenswood, Mr. Foster operated a commercial real
estate  firm  in  San  Francisco. He also co-founded the San Francisco Vintner's
Club,  serving  as  its  president  for  six  years, and served as an officer of
Draper  &  Esquin,  a  retail  wine  shop,  for  15 years. He received a B.A. in
philosophy  from Williams College and an M.B.A. from the Harvard Graduate School
of Business Administration.

     Joel   E.  Peterson  co-founded  Ravenswood  in  1976.  He  has  served  as
president,  winemaker  and  a director since Ravenswood's incorporation in 1986.
Mr.   Peterson's   duties  as  winemaker  involve  managing  and  directing  the
winemaking process. Mr. Peterson was a wine writer and a consultant in the art


                                       10


<PAGE>

of  traditional  winemaking  as practiced in Bordeaux and Burgundy. Mr. Peterson
holds  a  B.S. in Microbiology and Biochemistry from Oregon State University and
a  Medical  Technology  degree from the University of California, San Francisco.
Mr.  Peterson  was actively involved in immunology research at Mt. Zion Hospital
until 1977.

     Justin  M.  Faggioli  has  served as executive vice president of Ravenswood
since  January  1995  and as secretary and a director since October, 1996. Prior
to  joining  Ravenswood, from May 1991 until January 1995, Mr. Faggioli operated
a  2,600-acre  ranch  in  Sonoma  County  owned  by his wife's family and helped
develop  a  175-acre vineyard on that property. Mr. Faggioli holds B.S. and M.S.
degrees  in  Earth  Sciences  from  Stanford  University  and an M.B.A. from the
Harvard Graduate School of Business Administration.

     Callie  S.  Konno  has served as Ravenswood's chief financial officer since
1996  and  has  served  as  a director since February, 1999. From 1993 until her
appointment  as  chief  financial  officer,  Ms.  Konno  served  as secretary of
Ravenswood  and  was  responsible  for  various  accounting  and  administrative
duties.   She  holds  an  A.B.  in  History  and  International  Relations  from
Occidental  College  and an M.L.I.S. in Library and Information Studies from the
University  of  California,  Berkeley.  In  addition,  Ms.  Konno has passed the
Certified Public Accountants examination.


Factors that May Affect Future Results

     A  reduction  in  consumer  demand  for  premium red wines could affect our
business

     Because  a  large percentage of the wines we produce are premium red wines,
including   Merlot,  Cabernet  Sauvignon  and,  in  particular,  Zinfandel,  our
business  would  be  harmed  if  consumer  demand  for  red wines in general, or
Zinfandel  in  particular,  failed  to grow or declined. An overall reduction in
consumer demand for premium wine would also harm our business.

     A  reduction in the supply of grapes and bulk wine available to us from the
independent  grape  growers and bulk wine suppliers on whom we rely could reduce
our annual production of wine

     We  rely  on  annual contracts, some of which are not in writing, with over
80  independent  growers to purchase substantially all of the grapes used in our
wine  production.  We  cannot provide assurance that we will be able to contract
for  the  purchase  of grapes at acceptable prices from these or other suppliers
in  the  future. The terms of many of our purchase agreements also constrain our
ability  to  discontinue  purchasing grapes in circumstances where we might want
to  do  so.  Those  agreements  typically  provide  that, while either party may
terminate  the agreement at any time, both parties must continue to abide by its
terms for three years following termination.

     We  are  dependent  on bulk wine suppliers for the production of several of
our  wines,  particularly  our  Vintners  Blend Series. We do not have contracts
with  bulk  wine suppliers or agreements that would protect us from fluctuations
in  the  price  or availability of bulk wine. The availability and price of bulk
wine  significantly  affect  the  quality  and production levels of our products
that  contain  bulk wine. The price, quality and available quantity of bulk wine
have  fluctuated  in  the  past.  It  is  possible  that  we will not be able to
purchase  bulk wine of acceptable quality at acceptable prices and quantities in
the  future,  which  could  increase  the  cost  or reduce the amount of wine we
produce for sale. This could cause reductions in our sales and profits.

     Bad   weather,   plant   diseases,   pests,   including  the  glassy-winged
sharpshooter,  and  other  factors  could  reduce  the  amount or quality of the
grapes we need to produce our wines

     A  shortage  in the supply of quality grapes may result from the occurrence
of  any  number of the factors which determine the quality and quantity of grape
supply,  such  as weather conditions, pruning methods, the existence of diseases
and  pests,  and  the  number of vines producing grapes, as well as the level of
consumer  demand  for wine. Any shortage could cause an increase in the price of
some  or  all  of  the grape varieties required for our wine production and/or a
reduction  in  the  amount  of wine we are able to produce, which could harm our
business and reduce our sales and profits.

     For  example,  due to the effects of El Nino, the grape supply available to
us  for  the  1998 harvest was lower than for the 1997 harvest, which we believe
was an unusually large harvest. Therefore, the


                                       11


<PAGE>

inventory  of  our  1998 vintage may be less than that of our 1997 vintage. As a
result,  the  growth  of  our  sales  may be limited in fiscal year 2001, when a
portion of our 1998 vintage will be released for sale.

     Factors  which reduce the quantity of grapes may also reduce their quality,
which  in  turn  could  reduce  the  quality  or  amount  of  wine we produce. A
deterioration  in  the  quality  of  our  wines could harm our brand name, and a
decrease in our production could reduce our sales and profits.

     Although  we  grow  only a small portion of the grapes we use, our business
is  still  subject  to  numerous  agricultural risks. Most of the vineyards that
supply  our  grapes are primarily planted to rootstocks believed to be resistant
to  Phylloxera,  a  pest that feeds on susceptible grape rootstocks. We purchase
grapes  from  regions in California in which the glassy-winged sharpshooter has,
or  may  be  encountered.  The  glassy-winged sharpshooter can transmit Pierce's
Disearse  to  vineyards.  This  disease  is  often fatal to wine grape vines. To
date,  our  access  to  supplies of grapes and bulk wine has not been negatively
impacted  by  the  spread of the glassy-winged sharpshooter or Pierce's Disease.
However,  we  cannot be certain that these vineyards, or vineyards from which we
obtain  grapes  in  the  future,  will  not become susceptible to current or new
strains  of  Phylloxera,  plant insects, such as the glassy-winged sharpshooter,
or  diseases,  such as Pierce's Disease. Any resulting reduction in grape supply
could reduce our sales and profits.

     An  oversupply  of  grapes  may  also  harm  our business by increasing the
supply of wine sold by our competitors

     The  recent  increase  in  demand  for  premium  wine  has  resulted in the
planting  of  additional  vineyards,  both domestically and internationally, and
the  replanting  of  existing vineyards to greater densities, which could result
in  a  significant  increase in the supply of premium wine grapes. An oversupply
of  grapes  may  significantly  increase the amount of premium wine produced. An
increase  in the supply of premium wines could harm our business because we only
produce  premium  wines. Oversupply may also increase the amount of premium wine
available   to  our  distributors  and  retail  outlets,  which  would  increase
competition in our distribution channels.

     The  loss  of  Mr. Foster, Mr. Peterson or other key employees would damage
our reputation and business

     We  believe that our success largely depends on the continued employment of
a  number of our key employees, including W. Reed Foster, our chairman and chief
executive  officer,  and  Joel  E.  Peterson,  our  president and winemaker. Any
inability  or  unwillingness of Mr. Foster, Mr. Peterson or other key management
team  members  to  continue  in their present capacities could harm our business
and   our   reputation.  For  instance,  if  Mr.  Peterson's  relationship  with
Ravenswood  were  to terminate for any reason, we would need to find a successor
winemaker.  We  cannot  be  certain  that  we  could  find  or  hire a successor
winemaker with skills equivalent to those of Mr. Peterson.

     Because  a significant amount of our sales is made through brokers a change
in our relationship with any of them could harm our business

     In  the  2000  fiscal  year, approximately 75% of our gross sales were made
through  brokers.  A  change  in  our relationship with any of our brokers could
harm  our  business  and  reduce  our  sales.  Our  most  successful  broker was
responsible  for  21%  of  our  gross sales in the 2000 fiscal year, and our ten
most  successful brokers were responsible for 69% of our gross sales in the 2000
fiscal year.

     Because  some states have laws that prohibit distributor changes, our sales
may be reduced if we cannot replace an under-performing distributor

     Our  sales outside of California largely depend on the use of distributors.
Our  ten largest distributors accounted for approximately 23% of our gross sales
for  the  2000  fiscal  year,  and  we  expect  that  sales  to  our ten largest
distributors  will  continue  to represent a substantial portion of our sales in
the  future.  The  laws  and  regulations of several states prohibit distributor
changes  except  under  limited  circumstances. As a result, it may be difficult
for  us to replace distributors that do not perform adequately, which may reduce
our sales and profits.

     Our  business may be harmed if our distributors fail to market our products
effectively

                                       12


<PAGE>

     We  depend  largely  on  our  distributors  in  areas outside California to
market  our  products  to the restaurants and retail outlets they service. Other
premium  wine  producers,  as  well  as  the producers of alternative beverages,
compete   for   our   distributors'   marketing  resources.  A  failure  by  our
distributors   to   market  our  products  as  effectively  as  they,  or  other
distributors, market our competitors' products could harm our business.

     The  market  price  of our stock may fluctuate due to seasonal fluctuations
in our wine sales, operating expenses and net income

     We  experience  seasonal  and  quarterly  fluctuations  in sales, operating
expenses  and  net  income.  We  have  managed, and will continue to manage, our
business  to  achieve  long-term  objectives. In doing so, we may make decisions
that  we  believe  will  enhance  our  long-term  profitability,  even  if these
decisions  may  reduce  quarterly earnings. These decisions include: (a) when to
release  our  wines  for  sale; (b) how to position our wines competitively; and
(c)  which grape and bulk wine sources to use to produce our wines. In addition,
fluctuations  in our distributors' inventory levels may affect our sales volume.
These  and  other  factors  relating  to  seasonality and business decisions may
cause fluctuations in the market price of our common stock.

     We  also compete with popular, low-priced "generic" wines and with beer and
other  alcoholic  and  non-alcoholic beverages both for demand and for access to
distribution channels

     Many  of  the  producers of these beverages also have significantly greater
financial,  technical,  marketing and public relations resources than we do. Our
sales  may be harmed to the extent any alternative beverages are introduced that
compete  with  wine.  We  may  not be able to compete successfully against these
wine or alternative beverage producers.

     A  reduction  in  our  access  to,  or  an  increase  in  the  cost of, the
third-party services we use to produce our wine could harm our business

     We  utilize third-party facilities, of which there is a limited supply, for
the  production  activities  associated  with  our  wines.  Our inability in the
future  to  use these or alternative facilities, at reasonable prices or at all,
could  increase  the  cost  or  reduce the amount of our production, which could
reduce  our  sales and our profits. We do not have long-term agreements with any
of  these  facilities.  The  activities conducted at outside facilities include:
(a)  crushing;  (b)  fermentation;  (c) storage; (d) blending; and (e) bottling.
Our  reliance  on these third-parties varies according to the type of production
activity.   As  production  increases,  we  may  continue  to  rely  upon  these
third-party  production  facilities.  Reliance  on  third-parties will also vary
with annual harvest volumes.

     A  failure  to  complete  the  expansion of our facilities as planned could
limit our production of wine and harm our business

     We  recently  completed  Phase  I  of  our  production facility, the Quarry
Facility,  and  are  currently  utilizing  it to full capacity. We are currently
planning  to  expand  the  Quarry  Facility, in order to increase our production
capacity.  Our  failure  to  complete  the  expansion of the Quarry Facility, or
otherwise  expand  our  production  capabilities,  would  limit  our  production
capacity,  would  require  greater use of third-party production facilities, and
could  reduce  our  sales and/or profits. We expect to utilize the entire Quarry
Facility  fully  upon the completion of the contemplated expansion. As a result,
any  further  expansion  of  our  production  capacity  may  require  us  to use
third-party  production  facilities  or to continue to expand our own production
capacity.  Our  failure to expand our production capacity, or to secure capacity
from  third  parties,  either  at  acceptable  prices or at all, could limit our
production and reduce our sales and/or profits.

     Adverse public opinion about alcohol may harm our business

     While   a   number  of  research  studies  suggest  that  moderate  alcohol
consumption  may  provide  various  health  benefits,  other studies conclude or
suggest  that  alcohol  consumption  has no health benefits and may increase the
risk  of  stroke, cancer or other illnesses. An unfavorable report on the health
effects  of  alcohol consumption could significantly reduce the demand for wine,
which could harm our business and reduce our sales and profits.


                                       13


<PAGE>

     In  recent  years,  activist groups have used advertising and other methods
to  inform  the  public about the societal harms associated with the consumption
of  alcoholic  beverages.  These  groups have also sought, and continue to seek,
legislation  to  reduce the availability of alcoholic beverages, to increase the
penalties  associated with the misuse of alcoholic beverages, or to increase the
costs  associated  with  the production of alcoholic beverages. Over time, these
efforts  could  cause  a  reduction  in  the  consumption of alcoholic beverages
generally, which could harm our business and reduce or sales and profits.

     Contamination of our wines would harm our business

     Because  our  products  are designed for human consumption, our business is
subject   to   hazards  and  liabilities  related  to  food  products,  such  as
contamination.  A  discovery  of  contamination  in  any  of  our wines, through
tampering  or  otherwise,  could  result in a recall of our products. Any recall
would  significantly damage our reputation for product quality, which we believe
is  one  of  our  principal  competitive  assets,  and  could seriously harm our
business  and  sales.  Although  we  maintain insurance to protect against these
risks,  we  may  not  be able to maintain insurance on acceptable terms and this
insurance may not be adequate to cover any resulting liability.

     Increased regulatory costs or taxes would harm our financial performance

     The  wine  industry  is  regulated  extensively  by  the  Federal Bureau of
Alcohol,  Tobacco  and  Firearms,  various foreign agencies, and state and local
liquor   authorities.  These  regulations  and  laws  dictate  various  matters,
including:

     * Excise taxes

     * Licensing requirements

     * Trade and pricing practices

     * Permitted distribution channels

     * Permitted and required labeling

     * Advertising

     * Relationships with distributors and retailers

     Recent  and  future zoning ordinances, environmental restrictions and other
legal  requirements  may  limit  our plans to expand our production capacity, as
well  as  any  future development of new vineyards and wineries. Future legal or
regulatory  challenges  to  the  wine  industry could also harm our business and
impact our operating results.

     Because   our   directors   and  officers  have  significant  control  over
Ravenswood,  other  investors  do  not  have  as  much  influence  on  corporate
decisions as they would if control were less concentrated

     Assuming  all  convertible  debentures  held by our directors and executive
officers  and  their  respective  affiliates  will be converted, and all options
exercisable  within  60  days  of the date hereof by our directors and executive
officers,  will  be  exercised,  our  directors and executive officers and their
respective  affiliates  would beneficially own 2,242,976 shares of common stock,
or  approximately  46.5%  of  our  outstanding  common  stock  and  common stock
equivalents.  As  a  result,  our  directors  and  executive  officers and their
respective  affiliates  have  significant influence in the election of directors
and  the  approval  of  corporate  actions  that must be submitted for a vote of
shareholders.  The interests of these affiliates may conflict with the interests
of  other  shareholders, and the actions they take or approve may be contrary to
those  desired  by  the  other shareholders. This concentration of ownership may
also  have  the  effect  of  delaying, preventing or deterring an acquisition of
Ravenswood by a third party.

     Natural  disasters,  including  earthquakes  or  fires,  could  destroy our
facilities or our inventory

     California  experiences  earthquake activity from time to time, such as the
recent  earthquake  in Napa. The Gehricke Road Facility, the Quarry Facility and
all  of  the  third-party  facilities  we  use to produce and store our wine are
located  in  areas  that are subject to earthquake activity. If we lost all or a
portion of our


                                       14


<PAGE>

wine  prior  to  its sale or distribution as a result of earthquake activity, we
would  lose our investment in, and anticipated profits and cash flows from, that
wine.  Such  a  loss  would seriously harm our business and reduce our sales and
profits.

     In  addition, we must store our wine in a limited number of locations for a
period  of time prior to its sale or distribution. Any intervening catastrophes,
such  as  fire,  that  result in the destruction of all or a portion of our wine
would  result  in  a loss of our investment in, and anticipated profits and cash
flows  from, that wine. Such a loss would seriously harm our business and reduce
our sales and profits.

     Our  small  market  size  and  relatively  low trading volume may limit the
market price, liquidity or trading volume of our stock

     Our  small  size and relatively low trading volume may reduce the amount of
research  coverage  from  market  analysts.  This  reduced level of coverage may
limit the market price, liquidity or trading volume of our common stock.

     Risks associated with potential Year 2000 problems

     Even  though to date Ravenswood has not experienced any adverse impact from
the  transition  to  the Year 2000, Ravenswood cannot provide assurance that its
suppliers  and  customers  have  not  been  affected in a manner that is not yet
apparent.  As  a  result,  Ravenswood  will  continue  to  monitor its Year 2000
compliance  and  Year 2000 compliance of its suppliers and customers. Ravenswood
will  always  face  the  risk  presented by our, and our vendors' and suppliers'
reliance on technology and technologic services supplied by third parties.


Item 2. Properties

     Ravenswood  currently  operates  one  owned  and  four  leased locations in
Sonoma  and  one  leased  location  in Emeryville, California. The Gehricke Road
Facility,   which  Ravenswood  owns,  is  composed  of  two  buildings  totaling
approximately   12,600  square  feet.  This  facility  houses  tanks,  barrrels,
bottling  line  and  production  equipment  as well as administrative offices, a
small  laboratory,  a retail tasting room, and warehouse space for limited cased
goods  storage.  Ravenswood expects to crush and ferment small lots, such as the
Vineyard  Designate  Series, as well as some County series at this location. The
Gehricke  Road  Facility  is situated on approximately 25 acres, 14 of which are
Zinfandel and Merlot vineyards.

     During  fiscal  2000  Ravenswood  completed  construction of Phase I of the
Quarry  Facility, which is located on leased land consisting of approximately 20
acres  in  Sonoma  County.  Ravenswood  leases this property from the spouse and
brother-in-law  of  Justin  Faggioli,  its  executive  vice president. The lease
expires  on  December  31,  2032.  Current  monthly  lease  payments are $3,697,
subject  to annual adjustment. In addition, the lease provides Ravenswood with a
right  of first refusal to purchase a portion of the property and a first option
to rent upon its expiration, if specific conditions are met.

     The  Quarry  Facility  was  designed and built as a fully integrated winery
and  provides  space  for  administrative  and  production offices. The facility
consists  of  a  47,000 square foot building, capable of producing 250,000 cases
of  wine  annually,  with the necessary exterior infrastructure, including grape
crush  equipment,  mechanical  equipment, truck docks, septic system, wastewater
system,   fire   suppression  equipment,  access  roads  and  elements  commonly
associated  with  a  winery  operation.  The  building  includes  space  for the
fermentation,  storage  and  blending  of  wine,  barrel storage for wine aging,
bottling  equipment  and  limited  case  goods  storage. The use permit does not
include  public  tours  and  tasting  or  retail  sales, although it does permit
marketing events and similar industry-related activities.

     Phase  I  of  the  Quarry Facility was completed at a cost of approximately
$9.7  million,  with  capital equipment purchases of approximately $3.3 million.
Ravenswood  is  currently  planning  an  expansion  of  the  Quarry  Facility of
approximately  25,000  square  feet.  This expansion will be used for additional
barrel  and  tank  storage  and  Ravenswood  expects  to use the same design and
structure  as the existing barrel and cased goods areas. Ravenswood is currently
working  with  its  architect,  engineers  and  general contractor to submit the
project  for  design  review  and  to  obtain the necessary permits. Preliminary
estimates  of  the costs of the project range from $2.2 million to $2.7 million.
Ravenswood  expects  construction  of  the  expansion to begin in late Spring or
early Summer of calendar 2001.


                                       15


<PAGE>

     Ravenswood  leases  approximately  25,900 square feet at two locations that
are  used  for  barrel  storage  and  aging of wines. The lease for one of these
properties  provides  for  monthly  payments  of  $5,445  for 9,900 square feet,
subject  to annual adjustment, and expires on September 30, 2002, with an option
to  the  extend  the  lease  two  years to September 30, 2004. The lease for the
other  barrel  storage  and wine aging property provides for monthly payments of
$7,299  for  16,000  square  feet, subject to annual adjustments, and expires on
September 30, 2002 with a three-year option for renewal.

     In  April,  2000  Ravenswood  secured  approximately 32,000 square feet for
cased   goods   storage.   This   facility   services  Ravenswood's  California,
out-of-state  and  export  customers.  As  a  result, Ravenswood is able to more
closely  monitor  shipping  and  logistics  operations  and is less reliant upon
third-party  cased  goods  storage  facilities.  The  lease provides for monthly
payments  of  $14,171  and  expires  on  January  31,  2003, with two three-year
renewal  options.  Ravenswood  also  leases  approximately  1,880 square feet of
office  space in Emeryville for administrative and sales purposes. The lease for
the   office  provides  for  monthly  payments  of  $3,380,  subject  to  annual
adjustment and expires on April 30, 2005.


Item 3. Legal Proceedings

     There  are  no  material legal proceedings pending to which Ravenswood is a
party.  Ravenswood's  management knows of no legal actions being contemplated by
or against Ravenswood.


Item 4. Submission of Matters to a Vote of Security Holders

     None

                                       16


<PAGE>

                                    PART II


Item 5. Market for Registrant's Common Equity and Related Shareholder Matters

   Market Information

     Our  common stock is listed on the Nasdaq National Market System ("Nasdaq")
under  the  symbol  "RVWD". The table below states the high and low closing sale
prices  on  the Nasdaq National Market from our initial public offering on April
9, 1999 through the fiscal year ending June 30, 2000:

      Fiscal 2000                 High                 Low
      -----------                 ----                 ---
  Fourth Quarter                $ 14.25             $ 10.375
  Third Quarter                 $ 12.00             $ 10.50
  Second Quarter                $ 11.00             $ 10.438
  First Quarter                 $ 10.875            $ 10.375

      Fiscal 1999                 High                Low
      -----------                 ----                ---
  April 9 to June 30            $ 11.00             $ 10.438

   Shareholders

     The  number  of  common shareholders of record as of September 11, 2000 was
118.  This number excludes shareholders whose stock is held in nominee or street
name by brokers.

   Dividend Policy

     No  dividends  have  been declared on our common stock since incorporation.
It  is not anticipated that Ravenswood will pay any dividends in the foreseeable
future.  The  terms  of  Ravenswood's  credit  agreements impose restrictions on
Ravenswood's ability to declare and pay dividends.


                                       17


<PAGE>

Use of Proceeds

<TABLE>
     The  following  table  describes  the  use  of  proceeds  from Ravenswood's
initial public offering in April 1999.

<CAPTION>
(IN THOUSANDS)
<S>                                                          <C>
Effective Date of the Company's Registration Statement:      April 8, 1999
Commission File Number:                                      333-71729
Date Offering Commenced:                                     April 9, 1999
Date Offering Completed:                                     Upon the sale of all the shares
                                                              registered.
Names of Managing Underwriters:                              W.R. Hambrecht & Co., LLP
Class of Securities Registered:                              Common Stock
Shares Registered and Sold:                                  1,000 *
Sold by Company:                                             1,000 *
Sold by Shareholders:                                        0
Aggregate Price of Offering Amount Registered and Sold:      $10,500
Gross Proceeds to Company:                                   $10,500
Gross Proceeds to Selling Shareholders:                      0
Underwriter's Discounts and Commissions Charged to the
 Company:                                                    $   420
Other issuance costs:                                        $   546
Net offering proceeds to the Company:                        $ 9,534
Approximate use of net offering proceeds through June 30,
 2000:
 Working capital                                             $ 1,265
 Retirement of debt                                          $ 1,000
 Expansion of production facilities                          $ 3,350
<FN>
----------------
* In  connection  with  the  initial  public  offering,  Ravenswood  granted the
underwriters  an  over-allotment option to purchase 150,000 additional shares of
Ravenswood's  Common  Stock  at  the original initial public offering price. The
option was not exercised.
</FN>
</TABLE>


Item  6. Management's Discussion and Analysis of Financial Condition and Results
         of Operations

Fiscal years ended June 30, 2000 and 1999

Results of Operations

   Sales

     Net  sales  consist  of  gross sales of Ravenswood's wines and merchandise,
less  excise  taxes,  discounts,  returns and allowances. Net sales increased to
$33.2  million in the fiscal year ended June 30, 2000, from $22.1 million in the
fiscal  year  ended June 30, 1999. This increase is primarily attributable to an
increase  in  the volume of wines produced and sold by Ravenswood. In the fiscal
year  ended  June  30,  2000,  case  sales of Ravenswood's products increased to
412,866  cases  from 270,760 cases in the fiscal year ended June 30, 1999, while
the  average  price  per case decreased by approximately 1% from $86.39 per case
in  fiscal  1999 to $85.39 per case for fiscal 2000 (based on gross sales.) This
decrease  in average price per case is primarily attributable to the increase in
sales  of  Ravenswood's  value-priced  Vintners  Blend Series as a percentage of
gross sales.

     The  percentages  of gross sales attributable to the Vintners Blend Series,
County  Series  and  Vineyard  Designate  Series were approximately 63%, 22% and
14%, respectively, in the fiscal year ended


                                       18


<PAGE>

June  30,  2000,  as compared to 58%, 26% and 14%, respectively, in fiscal 1999.
Sales  of Ravenswood branded merchandise accounted for approximately 1% of gross
sales  for  the  fiscal  years ended June 30, 1999 and June 30, 2000. Ravenswood
expects  that  the  percentage of gross sales attributable to its Vintners Blend
Series  will  continue  to  increase  relative  to  sales  of Ravenswood's other
product  series  as  Ravenswood  continues  to expand its production and product
offerings in this segment.

   Cost of Goods Sold

     Cost of goods sold includes the cost of:

     * Grapes

     * Bulk wine

     * Packaging materials

     * Labor used in wine production

     * Bottling expense

     * Overhead  allocated  in  production  costs  from  winery facilities and
       equipment

     These  costs  are  capitalized as inventory, and depleted as costs of goods
sold  are recognized. Cost of goods sold increased to $15.7 million, or 47.2% of
net  sales, in the fiscal year ended June 30, 2000, from $10.3 million, or 46.5%
of  net  sales,  in  the  fiscal  year  ended June 30, 1999. The increase in the
amount  of  cost  of  goods  sold  is  primarily due to an increase in the total
volume  of  wine sold. The increase in cost of goods sold as a percentage of net
sales  is  attributable to the increase in sales of the Vintners Blend Series as
a  percentage  of  gross  sales.  The  Vintners  Blend Series results in a lower
margin  because  it  is  sold  at  a  lower  price point than Ravenswood's other
product series.

   Gross Profit

     Ravenswood's  gross  profit  increased  to $17.5 million in the fiscal year
ended  June 30, 2000, from $11.8 million in the fiscal year ended June 30, 1999,
and  decreased  as  a  percentage  of  net  sales  to  52.8% from 53.5% in these
respective  periods.  The  increase  in  the amount of gross profit is primarily
attributable  to  an  increase  in  sales  volumes across all product lines. The
decrease  in gross profit as a percentage of sales is due to a change in product
mix  sold  from  fiscal  1999  to  fiscal  2000,  with the Vintners Blend Series
accounting for a larger percentage of sales in fiscal 2000.

   Operating Expenses

     Operating  expenses  consist  of  sales and marketing overhead, commissions
paid  to  independent  brokers, advertising and merchandising expenses, salaries
and   facilities   expenses   unrelated   to   wine  production,  insurance  and
professional  services.  Operating  expenses  increased  to  $7.7 million in the
fiscal  year  ended  June  30,  2000, from $5.2 million in the fiscal year ended
June  30,  1999.  As  a  percentage  of  net sales, operating expenses decreased
slightly  to  23.3%  of  net  sales in the fiscal year ended June 30, 2000, from
23.7%  of  net  sales  in  the  fiscal year ended June 30, 1999. The increase in
operating  expenses  is  primarily attributable to brokerage commissions related
to   Ravenswood's   increased  sales,  increased  administrative  expenses  from
increased  sales and production, additional expenses incurred in moving into the
Quarry  Facility  and  the  additional  costs  associated with becoming a public
company  in  April,  1999. The decrease in operating expenses as a percentage of
net   sales  is  primarily  attributable  to  increased  sales  volumes  without
corresponding  increases  in  administrative  staff  or other overhead expenses.
Ravenswood  expects  total  operating  expenses  to  increase as it continues to
increase production and sales.

   Other Expense, Net

     Other  expense  consists  of  non-operating income and expense items, which
primarily  consist  of  interest  on  outstanding indebtedness. These items have
tended  to  fluctuate  from year to year. Other expense amounted to $589,723 and
$226,370  in  the  fiscal  years ended June 30, 2000 and 1999, respectively. The
increase  in  other  expenses  is  primarily  attributable to increased interest
expense.  In  fiscal  2000 Ravenswood was required to pay interest on $1,687,500
in  convertible  debentures  for  an  entire year, while in fiscal 1999 interest
expense  was  recognized for approximately six months of the year. Additionally,
Ravenswood  recognized  interest  expense  for funds borrowed in connection with
the  construction  of  the  Quarry Facility as well as on capital leases used to
fund the purchase of equipment


                                       19

<PAGE>

installed  at  the  Quarry Facility. Ravenswood expects that other expenses will
continue  to  increase as it is required to pay interest on those funds borrowed
to  construct  the  Quarry  Facility  and  on  capital  leases  used to purchase
additional equipment.


   Provision for Income Taxes

     The  provision  for income taxes reflects an estimated annualized effective
tax  rate of 36.6% at June 30, 2000, and 38.5% at June 30, 1999. The decrease in
the  effective  tax  rate  reflects  California State tax benefits realized from
manufacturer's  tax  credits  resulting  from  equipment  purchases made for the
Quarry  facility. Although Ravenswood normally experiences an effective tax rate
of  approximately  39.5%,  it  believes  it  will have a slight tax benefit from
equipment put into service during fiscal 2001.


   Net Income and Earnings Per Share

     Net  income  for  the  fiscal  year  ended  June 30, 2000 increased to $5.8
million,  as  compared  to $3.9 million for the fiscal year ended June 30, 1999.
The  increase  was  primarily  due  to  increased volume in sales. Fully diluted
earnings  per  share  for the fiscal year ended June 30, 2000 increased to $1.19
per share from $.96 per share for the fiscal year ended June 30, 1999.


Fiscal Years Ended June 30, 1999 and 1998


Results of Operations

   Sales

     Net  sales  of Ravenswood's products increased to $22.1 million in the 1999
fiscal  year,  from  $15.9  million  in  the  1998 fiscal year. This increase is
primarily  attributable  to an increase in the volume of wines produced and sold
by  Ravenswood.  In  the 1999 fiscal year, case sales increased to 270,760 cases
from  191,655  cases  in  the 1998 fiscal year, while the average price per case
decreased  from  $87.37  to  $86.39 in these respective periods. The decrease in
average  price  per  case  is primarily attributable to the increase in sales of
the value-priced Vintners Blend Series as a percentage of gross sales.

     The  percentages  of gross sales attributable to the Vintners Blend Series,
County   Series   and   Vineyard   Designate  Series  were  58%,  26%  and  14%,
respectively,  in  the  1999  fiscal  year,  as  compared  to  56%, 27% and 16%,
respectively,  in  the 1998 fiscal year. Sales of Ravenswood branded merchandise
accounted  for  approximately  1%  of gross sales for the fiscal year ended June
30, 1999, compared to 2% in the fiscal year ended June 30, 1998.


   Cost of Goods Sold

     Cost  of  goods  sold increased to $10.3 million, or 46.5% of net sales, in
the  1999  fiscal  year,  from  $7.4 million, or 46.6% of net sales, in the 1998
fiscal  year.  The  increase  in  the  amount  of  cost of goods sold over these
respective  periods  is  primarily  due to increases in the total volume of wine
sold.


   Gross Profit

     Ravenswood's  gross  profit  increased  to $11.8 million in the 1999 fiscal
year,  from  $8.5  million  in the 1998 fiscal year, and increased slightly as a
percentage  of  net  sales, to 53.5% from 53.4% in these respective periods. The
increase  in  aggregate  gross  profit is primarily attributable to increases in
sales  volumes  across  all  of  Ravenswood's  product  lines,  particularly the
Vintners Blend Series.


   Operating Expenses

     Deferred  Compensation  Expenses:  Deferred  compensation  expense  of $2.2
million  was  incurred  in  the  fiscal  year  ending June 30, 1998. No deferred
compensation expense was incurred in the fiscal year ended June 30, 1999.

     Other  Operating  Expenses:  Other  operating  expenses  increased  to $5.2
million  in the 1999 fiscal year, from $4.0 million in the 1998 fiscal year, and
decreased  as  a  percentage  of net sales to 23.7% in the 1999 fiscal year from
25.4%  in  the  1998  fiscal year. The increase in the amount of other operating
expenses  is  primarily  attributable  to  increases  in  brokerage  commissions
related to Ravenswood's


                                       20


<PAGE>

increased  sales  volumes,  particularly  in  California.  The decrease in other
operating  expenses  as  a  percentage of net sales is primarily attributable to
increased  sales volumes without corresponding increases in administrative staff
or other overhead expenses.

   Other Expense, Net

     Other  expense  amounted  to  $226,370  and  $474,340  in the 1999 and 1998
fiscal  years,  respectively,  and consists primarily of interest expense. These
items  have  tended  to  fluctuate  from year to year. The decrease is partially
attributable  to the increase in sales. Additionally, in fiscal 1999, Ravenswood
was  able to offset some interest expense with interest income from funds raised
in  their  private  placement  offering in December of 1998 as well as the funds
received in their initial public offering in April, 1999.

   Provision for Income Taxes

     The  provision for income taxes reflects the estimated annualized effective
tax  rate  of  38.5%  in the 1999 fiscal year and 89.5% in the 1998 fiscal year.
The  decrease  in effective tax rate is attributable to $2.1 million of deferred
compensation  expense that was recorded in fiscal 1998 as a permanent difference
between  financial  statements  reported  under  generally  accepted  accounting
principles and Ravenswood's tax return filed for fiscal 1998.

Liquidity and Capital Resources

     Ravenswood  has  funded  its capital requirements primarily with cash flows
from  operations,  a mix of short-term and long-term borrowings, and the sale of
its  securities.  Cash  and  cash  equivalents  totaled $5.8 million at June 30,
2000,  as  compared  to $11.4 million at June 30, 1999. The decrease in cash and
cash  equivalents  is  primarily  due to expenses related to building the Quarry
Facility and to increasing inventory.

     Net  cash  used  for operations was $527,634 for the fiscal year ended June
30,  2000  and  net cash provided by operations was $650,009 for the fiscal year
ended  June  30, 1999. The principal use of cash from operations for the periods
ended  June  30,  2000  and  June  30,  1999  was  the acquisition of additional
inventory  through  increased production, while the principal source of cash was
net income for both periods.

     Net  cash used for investing activities totaled $5.4 million for the fiscal
year  ended June 30, 2000, as compared to $4.7 million for the fiscal year ended
June  30,  1999.  The  principal  use  of  cash  for  both periods was the costs
associated  with  constructing  the Quarry Facility which was completed in June,
2000.  The  Quarry  Facility  was  completed  for  a  cost of approximately $9.7
million  with  capital  equipment  expenditures  of  approximately $3.3 million.
Ravenswood  expects  to  use  additional  cash  in  fiscal  2001 to complete the
bottling  line  at  the  Quarry  Facility  and to expand the Quarry Facility for
production  capacity. Approximately $286,000 was used to repay outstanding loans
from Ravenswood's officers in March, 1999.

     During  the  fiscal  year  ended  June  30, 1999, Ravenswood loaned W. Reed
Foster,  our  Chief Executive Officer, $310,000 to pay income taxes due from the
receipt  of shares issued upon termination of a deferred compensation agreement.

     Net  cash provided by financing activities was $311,441 for the fiscal year
ended  June  30,  2000,  as  compared to $15.3 million for the fiscal year ended
June  30, 1999. For the fiscal year ended June 30, 2000, the principal source of
cash  was  proceeds  from  long-term  debt  associated  with construction of the
Quarry  Facility  while  the  principal  uses of cash were payment of short-term
borrowings  and  payment  of  long-term  debt. In the fiscal year ended June 30,
1999,   the  principal  sources  of  cash  were  Ravenswood's  private  sale  of
securities  completed  in  December  1998  and  proceeds from its initial public
offering  in  April  1999. Additionally, during fiscal 1999, Ravenswood received
funds  through  long-term  debt  arrangements.  The  principal  use of cash from
financing  activities  in  this  period  was  for repayment of obligations under
Ravenswood's  various short- and long-term borrowing arrangements and payment of
expenses associated with the initial public offering.

     The  holders of $815,000 in convertible debentures issued in 1994 converted
to  285,250  shares  of  Ravenswood  common  stock  in  December,  1999.  If the
debentures  had not converted, Ravenswood would have been able to redeem them at
face  value  at  any  time  during  the  period beginning on January 1, 2000 and
ending December 31, 2004.


                                       21


<PAGE>

     The  full  extent  of  Ravenswood's  future  capital  requirements  and the
adequacy  of  its  available funds will depend on many factors, not all of which
can  be  accurately  predicted.  Although  no assurance can be given, Ravenswood
believes  that  anticipated  cash  flow  from  operations,  borrowings under its
existing  credit  agreements  and  proceeds  from its recent public offering and
other  recent  financing  activities  will  be  sufficient  to  fund its capital
requirements,  including  its  planned  expansion,  for  at least the next year.
However,  as  a  result  of  Ravenswood's  expected  growth  and planned capital
investments,  management  expects  to  increase  the utilization of Ravenswood's
credit  facilities  and potentially access alternative financing sources. Future
capital funding transactions may result in dilution to shareholders.

     There  can  be  no  assurance  that additional capital will be available on
favorable  terms,  if  at all. Ravenswood's ability to obtain additional capital
on  acceptable  terms would limit its growth and could have a negative impact on
its  business.  Ravenswood  uses  substantial  amounts of its working capital to
purchase  grapes  and  bulk  wine supplies from third parties and to pay for the
use  of  third-party  production  facilities  in its wine production. Ravenswood
also  uses  capital  to  fund  its  own grape-growing and winemaking activities.
Ravenswood  expects  that  it  will  need an increased amount of working capital
over  the  next  several  years  to  fund  increases in its production level and
inventory.


Risks associated with potential Year 2000 problems

     Even  though  to date Ravenswood has not experienced an adverse impact from
its  transition  to  Year  2000,  Ravenswood  cannot  provide assurance that its
suppliers  and  customers  have  not  been  affected in a manner that is not yet
apparent.  As  a  result,  Ravenswood  will  continue  to  monitor its Year 2000
compliance and Year 2000 compliance of its suppliers and customers.


                                       22


<PAGE>

Item 7. Financial Statements and Supplementary Data











                            RAVENSWOOD WINERY, INC.
                             FINANCIAL STATEMENTS
                    WITH REPORT OF INDEPENDENT ACCOUNTANTS
                                 *  *  *  *  *
                                 JUNE 30, 2000


                                       23


<PAGE>

August 11, 2000




To the Board of Directors and Shareholders of
Ravenswood Winery, Inc.




                       REPORT OF INDEPENDENT ACCOUNTANTS

     In  our  opinion, the accompanying balance sheet and the related statements
of  income,  shareholders' equity and cash flows present fairly, in all material
respects,  the  financial  position  of Ravenswood Winery, Inc. at June 30, 2000
and  1999,  and the results of its operations and its cash flows for each of the
fiscal  years  in  the three-year period ended June 30, 2000, in conformity with
generally  accepted  accounting  principles.  These financial statements are the
responsibility  of the Company's management; our responsibility is to express an
opinion  on  these  financial  statements  based on our audits. We conducted our
audits  of  these  statements  in  accordance  with  generally accepted auditing
standards  which  require  that  we  plan  and  perform  the  audits  to  obtain
reasonable  assurance  about  whether  the  financial  statements  are  free  of
material  misstatement.  An  audit includes examining, on a test basis, evidence
supporting  the  amounts  and disclosures in the financial statements, assessing
the  accounting  principles  used  and significant estimates made by management,
and  evaluating  the  overall  financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.



ODENBERG, ULLAKKO, MURANISHI & CO. LLP
San Francisco, California

                                       24


<PAGE>

<TABLE>

                            RAVENSWOOD WINERY, INC.

                                 BALANCE SHEET

                                     ASSETS

<CAPTION>
                                                                                    June 30,
                                                                        --------------------------------
                                                                              2000             1999
                                                                              ----             ----
<S>                                                                     <C>               <C>
Current assets:
 Cash and cash equivalents ..........................................   $  5,769,373      $ 11,390,903
 Accounts receivable, less allowance for doubtful accounts of
   $10,000 at June 30, 2000 and 1999 ................................      4,166,816         2,763,418
 Inventories ........................................................     20,521,284        14,581,973
 Prepaid income taxes ...............................................        277,500            15,850
 Prepaid expenses ...................................................        100,131           105,301
 Deferred tax assets ................................................            --            162,800
                                                                        ------------      ------------
      Total current assets ..........................................     30,835,104        29,020,245

Property, plant and equipment, net ..................................     14,787,553         9,001,147
Deferred tax assets .................................................        180,000               --
Note receivable from shareholder ....................................        310,000           310,000
Other assets ........................................................         60,433           186,921
                                                                        ------------      ------------
                                                                        $ 46,173,090      $ 38,518,313
                                                                        ============      ============

                                    LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Current portion of long-term debt ................................   $     83,597      $    109,722
   Current portion of capital lease obligations .....................        617,979           368,203
   Short-term borrowings ............................................        500,000         1,700,000
   Accounts payable .................................................      3,217,036         3,382,118
   Accrued commissions ..............................................        514,379           396,358
   Accrued liabilities ..............................................        390,010           433,011
                                                                        ------------      ------------
      Total current liabilities .....................................      5,323,001         6,389,412
Long-term liabilities:
   Long-term debt, net ..............................................      6,453,407         4,525,231
   Capital lease obligations, net ...................................      2,392,497         1,551,762
   Convertible debentures ...........................................      1,687,500         2,502,500
                                                                        ------------      ------------
      Total liabilities .............................................     15,856,405        14,968,905
                                                                        ------------      ------------
Shareholders' equity:
   Preferred stock, no par value; 1 million shares authorized,
    none issued .....................................................            --                --
   Common stock, no par value, 20 million shares authorized .........     15,054,373        14,211,018
   Retained earnings ................................................     15,176,560         9,338,390
   Unrealized gain on available-for-sale securities .................         85,752               --
                                                                        ------------      ------------
      Total shareholders' equity ....................................     30,316,685        23,549,408
                                                                        ------------      ------------
Commitments and contingencies (See Note 14) .........................   $ 46,173,090      $ 38,518,313
                                                                        ============      ============
<FN>

                See accompanying notes to financial statements.
</FN>
</TABLE>

                                       25


<PAGE>

<TABLE>
                            RAVENSWOOD WINERY, INC.

                              STATEMENT OF INCOME

<CAPTION>
                                                             Year ended June 30,
                                             ------------------------------------------------
                                                 2000              1999              1998
                                             ------------      ------------      ------------
<S>                                          <C>               <C>               <C>
Gross sales ..............................   $35,615,207       $23,729,787       $17,016,866
   Less excise taxes .....................     1,263,567           908,446           552,499
   Less discounts, returns and
    allowances ...........................     1,125,503           752,655           573,762
                                             ------------      ------------      ------------

Net sales ................................    33,226,137        22,068,686        15,890,605

Cost of goods sold .......................    15,696,651        10,259,357         7,397,362
                                             ------------      ------------      ------------
Gross profit .............................    17,529,486        11,809,329         8,493,243

Operating expenses:
   Deferred compensation expense .........           --                --          2,206,096
   Other operating expenses ..............     7,735,493         5,238,493         4,033,747
                                             ------------      ------------      ------------

Operating income .........................     9,793,993         6,570,836         2,253,400
                                             ------------      ------------      ------------
Other income (expense):
   Interest expense ......................      (861,992)         (459,851)         (523,551)
   Other, net ............................       272,269           233,481            49,211
                                             ------------      ------------      ------------
                                                (589,723)         (226,370)         (474,340)
                                             ------------      ------------      ------------


Income before tax provision ..............     9,204,270         6,344,466         1,779,060

Provision for income taxes ...............     3,366,100         2,441,000         1,592,169
                                             ------------      ------------      ------------

Net income ...............................   $ 5,838,170       $ 3,903,466       $   186,891
                                             ============      ============      ============
Earnings per share:
   Basic .................................   $      1.24       $      1.04       $      0.05
                                             ============      ============      ============
   Diluted ...............................   $      1.19       $      0.96       $      0.05
                                             ============      ============      ============

Weighted average number of common
 shares outstanding:
   Basic .................................     4,712,478         3,763,765         3,512,069
                                             ============      ============      ============
   Diluted ...............................     5,010,955         4,171,245         3,814,820
                                             ============      ============      ============
<FN>

                See accompanying notes to financial statements.
</FN>
</TABLE>

                                       26


<PAGE>
<TABLE>

                            RAVENSWOOD WINERY, INC.

                       STATEMENT OF SHAREHOLDERS' EQUITY

<CAPTION>
                                                     Common Stock
                                            ------------------------------       Retained       Unrealized
                                                Shares          Amount           Earnings          Gain           Total
                                            -------------   --------------   ---------------   -----------   ---------------
<S>                                         <C>             <C>              <C>               <C>           <C>
Balance at June 30, 1997 ................     3,149,998      $   737,804       $ 5,521,288      $    --        $ 6,259,092
Repurchase of common shares
 from former officer ....................      (157,500)          (5,000)         (273,255)                       (278,255)
Compensation related to deferred
 compensation plan ......................                      2,206,096                                         2,206,096
Net income ..............................                                          186,891                         186,891
                                              ---------      -----------       -----------      --------       -----------
Balance at June 30, 1998 ................     2,992,498        2,938,900         5,434,924           --          8,373,824
Common stock issued:
   Initial public offering, net .........     1,000,000        9,534,618                                         9,534,618
   Private placement ....................       212,623        1,687,500                                         1,687,500
   Convertible debentures ...............        17,500           50,000                                            50,000
   Deferred compensation ................       345,731
Net income ..............................                                        3,903,466                       3,903,466
                                              ---------      -----------       -----------      --------       -----------
Balance at June 30, 1999 ................     4,568,352       14,211,018         9,338,390           --         23,549,408
Common stock issued:
   Convertible debentures ...............       285,250          815,000                                           815,000
   Employee stock plan ..................         3,177           28,355                                            28,355
Unrealized gain on
 available-for-sale securities ..........                                                         85,752            85,752
Net income ..............................                                        5,838,170                       5,838,170
                                              ---------      -----------       -----------      --------       -----------
Balance at June 30, 2000 ................     4,856,779      $15,054,373       $15,176,560      $ 85,752       $30,316,685
                                              =========      ===========       ===========      ========       ===========
<FN>

                See accompanying notes to financial statements.
</FN>
</TABLE>

                                       27


<PAGE>
<TABLE>

                            RAVENSWOOD WINERY, INC.

                            STATEMENT OF CASH FLOWS

<CAPTION>
                                                                          Year ended June 30,
                                                          ---------------------------------------------------
                                                               2000              1999               1998
                                                          --------------   ----------------   ---------------
<S>                                                       <C>              <C>                <C>
Operating activities:
Net income ..............................................  $  5,838,170      $  3,903,466      $    186,891
Items not requiring the current use of cash:
   Depreciation and amortization ........................     1,128,407           437,760           391,844
   Deferred income taxes ................................       301,800           108,022           (77,868)
   Unrealized gain on available-for-sale securities .....        85,752               --                --
   Deferred compensation ................................           --                --          2,206,096
   Changes in other operating items:
      Accounts receivable ...............................    (1,403,398)         (856,920)         (338,007)
      Inventories .......................................    (5,939,311)       (4,154,614)       (3,269,357)
      Prepaid income taxes ..............................      (580,650)           57,999           (39,963)
      Prepaid expenses ..................................         5,170           (62,258)            9,202
      Other assets ......................................       126,488           (36,469)           (8,220)
      Accounts payable ..................................      (165,082)        1,051,151           604,979
      Accrued liabilities and accrued commission ........        75,020           201,872           200,292
                                                           ------------      ------------      ------------
   Cash provided by (used for) operations ...............      (527,634)          650,009          (134,111)
                                                           ------------      ------------      ------------
Investing activities:
Additions to plant and equipment ........................    (5,405,337)       (4,397,848)         (490,621)
Officer receivables, net ................................           --           (286,163)              --
                                                           ------------      ------------      ------------
   Cash used for investing activities ...................    (5,405,337)       (4,684,011)         (490,621)
                                                           ------------      ------------      ------------
Financing activities:
Short-term borrowings, net ..............................    (1,200,000)          350,000           651,801
Proceeds from long-term debt ............................     2,097,234         2,818,464           410,642
Repayment of long-term debt .............................      (614,148)         (415,688)         (269,145)
Issuance of common shares ...............................        28,355        12,091,489               --
Stock offering costs ....................................           --           (965,382)              --
Proceeds from convertible debentures ....................           --          1,443,750               --
Repurchase of common shares from former officer .........           --                --           (278,255)
                                                           ------------      ------------      ------------
   Cash provided by financing activities ................       311,441        15,322,633           515,043
                                                           ------------      ------------      ------------
Increase (decrease) in cash and cash equivalents ........    (5,621,530)       11,288,631          (109,689)
Cash and cash equivalents at beginning of period ........    11,390,903           102,272           211,961
                                                           ------------      ------------      ------------
Cash and cash equivalents at end of period ..............  $  5,769,373      $ 11,390,903      $    102,272
                                                           ============      ============      ============
<FN>

                See accompanying notes to financial statements.
</FN>
</TABLE>

                                       28


<PAGE>

                            RAVENSWOOD WINERY, INC.

                         NOTES TO FINANCIAL STATEMENTS


NOTE 1--Organization, operations and summary of significant accounting policies:

   Organization

     Ravenswood  Winery,  Inc.  (the  "Company")  was  founded in 1976, became a
California  Limited  Partnership  in  1979, and was subsequently incorporated in
the  State  of  California  on December 23, 1986. The Company produces, markets,
and  sells premium California wines exclusively under the Ravenswood brand name.

   Concentration of risk

     The  Company  obtains its grapes from over eighty independent grape growers
and  bulk  wine  suppliers  located primarily in Sonoma, Napa and other Northern
California  counties.  These  sources account for 95% or more of its annual wine
production.  The Company relies upon certain varietals, notably Zinfandel, which
accounted  for  approximately  65% of the total dollar sales for the fiscal year
ended  June  30,  2000  (67% of the total dollar sales for the fiscal year ended
June  30,  1999).  In addition, the Company relies on the winemaking capacity of
other  companies  and  typically  enters into one-year contracts with all custom
crush facilities.

     In  fiscal  2000, approximately 75% of gross sales were made using brokers,
with   one   broker  accounting  for  21%  of  gross  sales.  (In  fiscal  1999,
approximately  75%  of  gross  sales  were  made  using brokers, with one broker
accounting for 22% of gross sales.)

     The  Company  performs  ongoing  credit evaluations of its distributors and
customers  and  generally  does  not  require  collateral.  The Company's credit
losses have been within the reserves provided.

     The  Company  places its cash and temporary cash investments with financial
institutions.  At  June  30,  2000  and periodically throughout the fiscal year,
such investments were in excess of FDIC insurance limits.

     A summary of significant accounting policies follows:

   Revenue recognition

     Revenue  is  recognized when merchandise is shipped and title passes to the
customer.  Revenue from products sold at our tasting room location is recognized
at the time of sale.

   Cash and cash equivalents

     The  Company  considers  all  short-term, interest-bearing investments with
original  maturities  of  less  than  three months to be cash equivalents. These
investments  are currently held in U.S. Treasuries, commercial paper, government
securities and money market funds.

   Inventories

     Inventories  are  stated  at  the lower of cost or market (on the first-in,
first-out   basis),   and  include  finished  goods,  raw  materials,  packaging
materials   and  product  merchandise.  Finished  goods  include  costs  of  raw
materials  (grapes  and  bulk  wine),  packaging, labor used in wine production,
bottling, warehousing and overhead on winery facilities and equipment.

     Costs  associated  with  growing  crops  are  recorded as inventory and are
recognized  as  inventory  costs in the fiscal year in which the related crop is
harvested.

     In  accordance with general practice in the wine industry, wine inventories
are  included  in  current assets, although a portion of such inventories may be
aged for periods longer than one year.

   Property, plant and equipment

     Property,  plant and equipment are carried at cost. The cost of repairs and
maintenance  is  expensed  as  incurred; major replacements and improvements are
capitalized.  Costs  incurred in developing vineyards, including interest costs,
are capitalized until the vineyards become commercially productive.


                                       29


<PAGE>

                            RAVENSWOOD WINERY, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (Continued)

When  assets  are  retired or disposed of, the cost and accumulated depreciation
are  removed  from  the accounts, and any resulting gains or losses are included
in income in the year of disposition.

     Depreciation  is  computed  using  both  the  straight-line and accelerated
methods  over  the  estimated  useful lives of the assets, generally 7 years for
vineyards,  39  years for building and improvements, 5 to 15 years for machinery
and  equipment  and  3  to  7 years for office equipment. Leased equipment under
capitalized  leases  is generally amortized over the shorter of the terms of the
leases  or  their  estimated  useful lives. Leasehold improvements are amortized
over  the estimated useful lives of the improvements or the terms of the related
lease, whichever is shorter.

     Impairment  of  long-lived  assets  is measured on the basis of anticipated
undiscounted  cash  flows  for each asset. No impairment loss was recognized for
the fiscal years ended June 30, 2000, 1999 and 1998.

   Income taxes

     Deferred  income  taxes  are computed using the liability method. Under the
liability  method,  taxes  are  recorded  based on the future tax effects of the
difference  between  the  tax  and  financial  reporting  bases of the Company's
assets and liabilities.

   Use of estimates

     The  preparation  of  financial  statements  in  conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect  the  reported  amounts  of assets and liabilities and
disclosure  of  contingent  assets  and liabilities at the date of the financial
statements,  and  the  reported  amounts  of  revenues  and  expenses during the
reporting  period.  Actual  results  when  ultimately realized could differ from
those estimates.

   Fair value of financial instruments

     The  carrying  amounts  of  accounts receivable, prepaid expenses, accounts
payable,  accrued  liabilities,  short-term  borrowings, long-term debt, capital
lease  obligations  and  convertible  debentures are reasonable estimates of the
fair value of these financial instruments.

   Earnings per share

     Basic   earnings   per   share   represents   income  available  to  common
shareholders   divided   by   the  weighted  average  number  of  common  shares
outstanding  during  the measurement period, after giving retroactive effect to:
1)  shares issued under a deferred compensation arrangement in July 1998; and 2)
common  stock  issued  in  December  1998 (using the "treasury stock method") at
prices below the initial public offering price of $10.50.

     Diluted  earnings  per  share  represents  the  income  available to common
shareholders  divided  by:  1)  the  weighted  average  number  of common shares
outstanding  during  the  measurement period, after giving retroactive effect to
a)  shares issued under a deferred compensation arrangement in July 1998; and b)
common  stock  issued  in  December  1998 (using the "treasury stock method") at
prices  below  the initial public offering price of $10.50 per share; and 2) the
potentially  dilutive  common  shares  issuable  for  convertible debt and stock
options that were outstanding during the measurement period.

   Stock-based compensation

     The   Company   has  adopted  SFAS  No.  123,  Accounting  for  Stock-Based
Compensation  ("SFAS  123").  As  permitted  by  SFAS  123, the Company measures
compensation  cost  in  accordance  with Accounting Principles Board Opinion No.
25,  Accounting  for  Stock  Issued  to  Employees  ("APB  No. 25"), and related
interpretations.  Accordingly,  no  accounting  recognition  is  given  to stock
options  granted  at  fair market value until they are exercised. Upon exercise,
net proceeds, including income tax benefits realized, are credited to equity.


                                       30


<PAGE>

                            RAVENSWOOD WINERY, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (Continued)

   Reclassification of financial statement presentation

     Certain  prior period amounts have been reclassified in order to conform to
the fiscal 2000 financial statement presentation.

   Recent accounting pronouncements

     In  June  1998,  the  Financial  Accounting Standards Board ("FASB") issued
SFAS  No.  133,  "Accounting  for Derivative Instruments and Hedging Activities"
that  establishes  accounting and reporting standards for derivative instruments
and  hedging  activities.  It  requires  that  derivatives  be recognized in the
balance  sheet  at  fair  value and specifies the accounting for changes in fair
value.  In  June  1999, the FASB issued SFAS No. 137, which defers the effective
date  of  SFAS  No.  133  until  fiscal years beginning after June 15, 2000. The
adoption  of  SFAS  No.  133  is  not  expected to have a material effect on the
Company's financial statements.


NOTE 2--Inventories:
     Inventories are summarized as follows:

                                               June 30,
                                    -------------------------------
                                         2000             1999
                                    --------------   --------------
  Bulk wine .......................  $15,262,865      $10,355,759
  Bottled wine ....................    4,716,701        3,870,548
  Crop costs ......................      137,051           88,725
  Supplies ........................      233,943          124,298
  Tasting room merchandise ........      170,724          142,643
                                     -----------      -----------
                                     $20,521,284      $14,581,973
                                     ===========      ===========

     Certain  of  the  foregoing  assets  are  pledged  as  security for certain
indebtedness (see Notes 5 and 6).


NOTE 3--Property, plant and equipment:

<TABLE>
     Property, plant and equipment are summarized as follows:

<CAPTION>
                                                                   June 30,
                                                         -----------------------------
                                                              2000            1999
                                                         --------------   ------------
<S>                                                      <C>              <C>
         Land ........................................   $   245,135      $  245,135
         Vineyards ...................................       345,473         345,473
         Buildings and improvements ..................     1,647,637       1,647,637
         Leasehold improvements ......................     9,832,748         174,331
         Machinery and equipment .....................     1,080,251       1,020,007
         Equipment held under capital leases .........     4,118,953       2,623,977
         Office equipment ............................       298,837         131,127
                                                         -----------      ----------
                                                          17,569,034       6,187,687
         Less accumulated depreciation ...............     2,781,481       1,653,074
                                                         -----------      ----------
                                                          14,787,553       4,534,613
         Construction in progress ....................           --        4,466,534
                                                         -----------      ----------
                                                         $14,787,553      $9,001,147
                                                         ===========      ==========
</TABLE>


                                       31


<PAGE>

                            RAVENSWOOD WINERY, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (Continued)

     Included  in  leasehold  improvements  are  costs  associated  with the new
Quarry  facility  including  the  following:  building core and shell, equipment
installation  and  related  improvement costs and site improvements. Included in
equipment  held  under  capital  leases are barrels and other equipment with net
book  values  of  $2,874,654  and $1,932,484, respectively, at June 30, 2000 and
1999.

     Substantially  all  of  the  property,  plant  and  equipment is pledged as
security for certain indebtedness (see Notes 5, 6 and 7).


NOTE 4--Note receivable from shareholder:

     The  note receivable from shareholder at June 30, 2000 and 1999 consists of
a  $310,000  note  bearing  annual  interest at 5.3%, payable in annual interest
only  installments  commencing  December 21, 1999 until maturity on December 21,
2008.  The  Company provided the loan to the officer to pay taxes related to his
receipt of common stock under a deferred compensation plan.


NOTE 5--Short-term borrowing arrangements:

     At  June  30,  2000,  the Company has a $2 million revolving line of credit
with  Pacific  Coast  Farm  Credit  Services (the "Association") that expires on
June  1, 2001. The loan agreement provides that the principal advances under the
facility  cannot  exceed certain percentages of eligible accounts receivable and
wine  inventories  as  defined  in  the  agreement.  The  borrowings bear annual
interest  at  a variable rate established by the Association (9.02% and 8.11% at
June  30,  2000  and  1999,  respectively).  The  borrowings  are secured by the
Company's  accounts receivable, wine inventories and equipment. Borrowings under
the  line  of  credit  at  June  30, 2000 and 1999 were $500,000 and $1,700,000,
respectively.

     The  revolving  credit  line  and  certain  of  the  long-term debt contain
various  covenants  which include, among other things, a requirement to maintain
a  minimum  working capital of $3.25 million, a ratio of liabilities to tangible
net  worth  of  not greater than 1.5 to 1, a current ratio of at least 1.75 to 1
and  restrictions on the payment of dividends and distributions to shareholders.



                                       32


<PAGE>

                            RAVENSWOOD WINERY, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (Continued)

NOTE 6--Long-term debt:

<TABLE>
     Long-term debt is summarized as follows:

<CAPTION>
                                                                                       June 30,
                                                                            -------------------------------
                                                                                 2000             1999
                                                                            --------------   --------------
<S>                                                                         <C>              <C>
Note payable to Pacific Coast Farm Credit Services ("Association") with
 annual interest at a variable rate established by the Association
 (8.56% and 6.9% at June 30, 2000 and 1999, respectively), payable
 in quarterly interest installments until December 1, 1999 and com-
 mencing March 1, 2000 in quarterly principal and interest installments
 of $34,795 through December 1, 2024, secured by property, plant
 and equipment (see Note 3) ...............................................  $ 1,543,775      $ 1,552,500
Construction mortgage loan payable ($4.58 million commitment) to the
 Association with annual interest at a variable rate established by the
 Association (8.56% and 6.9% at June 30, 2000 and 1999, respec-
 tively), payable in quarterly interest installments until January 1, 2001;
 and commencing April 1, 2001 in quarterly principal and interest in-
 stallments of $98,117 through January 1, 2026, secured by property,
 plant and equipment (see Note 3) .........................................    4,125,000        2,013,353
Construction revolving equity line of credit payable to the Association
 with annual interest at a variable rate established by the Association
 (8.56% and 6.9% at June 30, 2000 and 1999, respectively), payable
 in quarterly interest only installments until December 1, 1999 and
 commencing March 1, 2000 in equal quarterly principal and interest
 installments of $19,284 through December 1, 2024, secured by prop-
 erty, plant and equipment (see Note 3) ...................................      829,550          835,000
Note payable to the Association with annual interest at a variable rate
 established by the Association (8.11% at June 30, 1999), payable in
 quarterly principal and interest installments of $17,390 through June
 1, 2002, secured by accounts receivable and wine inventories. Paid
 in full during fiscal 2000 ...............................................          --           175,459
Other notes payable with annual interest ranging from 10% to 11%,
 payable in monthly principal and interest installments as defined to
 November 2000 through June 2001 ..........................................       38,679           58,641
                                                                             -----------      -----------
                                                                               6,537,004        4,634,953
Less current portion ......................................................       83,597          109,722
                                                                             -----------      -----------
                                                                             $ 6,453,407      $ 4,525,231
                                                                             ===========      ===========
</TABLE>

     Scheduled   annual   maturities   of   long-term   debt   are  as  follows:
$83,597--fiscal    2001;    $121,609--fiscal    2002;   $121,505--fiscal   2003;
$127,509--fiscal 2004; $137,508--fiscal 2005; and $5,945,276 thereafter.


                                       33


<PAGE>

                            RAVENSWOOD WINERY, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (Continued)

NOTE 7--Capital lease obligations:

     The  Company  leases  barrels and other equipment that are accounted for as
capital  leases.  Minimum  future lease payments under the capital leases are as
follows:

       Fiscal year
       -----------
       2001 ................................................    $   864,744
       2002 ................................................        787,123
       2003 ................................................        708,322
       2004 ................................................        597,150
       2005 ................................................        424,587
       Thereafter ..........................................        282,967
                                                                -----------
       Net minimum lease payments ..........................      3,664,893
       Less--amount representing interest (weighted
        average--8.4%) .....................................        654,417
                                                                -----------
       Present value of net minimum lease payments .........      3,010,476
       Less--current portion ...............................        617,979
                                                                -----------
                                                                $ 2,392,497
                                                                ===========

     The  net  book  value of leased barrels and equipment included in property,
plant and equipment at June 30, 2000 is $2,874,654 (see Note 3).

     Subsequent  to  June  30, 2000, the Company has obtained a $2 million lease
line  commitment  for  the  acquisition  of oak barrels, various stainless steel
cooperage and wine production equipment.


NOTE 8--Convertible debentures:

     Convertible debentures are summarized as follows:

                                                          June 30,
                                               -------------------------------
                                                    2000             1999
                                               --------------   --------------
         1998 convertible debentures ......... $ 1,687,500      $ 1,687,500
         1994 convertible debentures .........         --           815,000
                                               -----------      -----------
                                               $ 1,687,500      $ 2,502,500
                                               ===========      ===========

     In   December   1998,  the  Company  completed  a  sale  of  $1,687,500  in
convertible  debentures  due  December  31,  2008.  Each  $10,000  debenture  is
convertible  into  900  shares of common stock at any time prior to December 31,
2003  upon  request  of  the  holder.  If  the debentures are not converted, the
Company  may  redeem  them  at  face  value  at  any time during the period from
January  1, 2004 until the maturity date. The Company pays interest quarterly on
the  debentures  in an amount equal to the prime interest rate quoted by Bank of
America  NT & SA plus 1% (10% and 8.75% at June 30, 2000 and 1999). The interest
rate  is  adjusted  every  18  months, except that in no period may the interest
rate adjustment exceed 2% or the maximum interest rate exceed 11%.

     In  December  1994, the Company completed a sale of $865,000 in convertible
debentures  due  December  31, 2004. Each $10,000 debenture was convertible into
3,500  shares  of  common  stock  at  any  time  prior to December 31, 1999 upon
request  of  the holder. If the debentures were not converted, the Company could
redeem  them  at  face  value at any time during the period from January 1, 2000
until  the  maturity date. The Company paid interest quarterly on the debentures
in  an amount equal to a floating index tied to prime bank rates for a five-year
period  (9.25%  at  June  30,  1999).  The  interest  rate was adjusted every 18
months,  except  that in no period could the interest rate adjustment exceed 2%,
or the


                                       34


<PAGE>

                            RAVENSWOOD WINERY, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (Continued)

maximum  interest  rate  exceed 11%. During the fiscal year ended June 30, 2000,
the  remaining  1994 debentures ($815,000) were converted into 285,250 shares of
common stock.


NOTE 9--Income taxes:

     The provision for income taxes is as follows:

                                            Fiscal year ended June 30,
                                  ----------------------------------------------
                                       2000            1999             1998
                                  -------------   -------------   --------------
Current tax expense:
   Federal ....................    $2,815,000     $ 1,831,000       $ 1,306,069
   State and local ............       576,100         502,000           363,968
                                   ----------     -----------       -----------
                                    3,391,100       2,333,000         1,670,037
                                   ----------     -----------       -----------
Deferred tax expense (benefit):
   Federal ....................       260,000          55,000           (71,875)
   State and local ............      (285,000)         53,000            (5,993)
                                   ----------     -----------       -----------
                                      (25,000)        108,000           (77,868)
                                   ----------     -----------       -----------
                                   $3,366,100     $ 2,441,000       $ 1,592,169
                                   ==========     ===========       ===========

     Deferred  income  taxes  are provided for the temporary differences between
the  financial  reporting and tax bases of the Company's assets and liabilities.
Valuation  allowances  are  established  when  necessary  to reduce deferred tax
assets to the amount expected to be realized.

     Deferred tax assets and liabilities are comprised of the following:

                                                             June 30,
                                                    ---------------------------
                                                        2000           1999
                                                    ------------   ------------
Deferred tax assets:
  Basis difference in inventory ...................  $  190,000
  California manufacturer's tax credit carryover ..     210,000
  State taxes .....................................     205,000     $ 170,000
                                                     ----------     ---------
                                                        605,000       170,000
Deferred tax liabilities:
  Depreciation and amortization ...................    (425,000)       (7,200)
                                                     ----------     ---------
Net deferred tax asset (liability) ................  $  180,000     $ 162,800
                                                     ==========     =========


                                       35


<PAGE>

                            RAVENSWOOD WINERY, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (Continued)

<TABLE>
     A  reconciliation of income tax computed at the federal statutory corporate
tax rate to the provision for income taxes follows (in thousands):

<CAPTION>
                                                                            Fiscal year ended June 30,
                                                   -----------------------------------------------------------------------------
                                                            2000                       1999                       1998
                                                   -----------------------   -------------------------   -----------------------
                                                     Amount          %          Amount           %         Amount          %
                                                   ----------   ----------   ------------   ----------   ----------   ----------
<S>                                                <C>          <C>          <C>            <C>          <C>          <C>
Income taxes at federal statutory rate .........    $ 3,130         34.0%      $ 2,157          34.0%     $   605         34.0%
Increase (decrease) in income taxes
 resulting from:
State and local income taxes, net of
 federal benefit ...............................        534          5.8%          369           5.8%         228         12.9%
Permanent differences:
Deferred compensation ..........................         --           --           --             --          759         42.6%
California manufacturers' tax credit ...........       (329)        -3.5%           (6)         -0.1%          --           --
Other ..........................................         31          0.3%          (79)         -1.2%          --           --
                                                    -------        -----       --------        -----      -------         ----
                                                    $ 3,366         36.6%      $ 2,441          38.5%     $ 1,592         89.5%
                                                    =======        =====       ========        =====      =======         ====
</TABLE>

     The   Company   has  California  manufacturer's  tax  credit  carryforwards
available  to offset future taxable income for California income tax purposes of
approximately $320,000, which do not expire.


NOTE 10--Deferred compensation agreement:

     On  August  25,  1992,  the  Company  entered  into a deferred compensation
agreement  with  its  chairman  and chief executive officer, W. Reed Foster. The
agreement  established  an  account  with  5,487.8  units.  Each  unit  was  the
equivalent  value of one share of common stock and contained an equivalent right
to  cash and common stock dividends and all stock splits and other benefits paid
to  the  shareholders  of  the  Company.  Compensation  expense relating to this
agreement  was $2,206,096 for fiscal 1998, and is included in operating expenses
in the accompanying statement of income.

     As  of July 1, 1998, the deferred compensation agreement was terminated and
the   Company   issued  345,731  shares  of  common  stock  to  Mr.  Foster.  No
compensation  expense  was  incurred for the fiscal years ended June 30, 2000 or
1999.


NOTE 11--Voting trust:

     On  August  25,  1992,  the Board of Directors authorized the creation of a
Voting  Trust for certain shares of the common stock of the Company. On November
1,  1993,  the  shareholders  approved the terms and conditions contained in the
Trust  which  provided  for four trustees (Joel Peterson, W. Reed Foster, Justin
Faggioli  and  Callie S. Konno). The original Voting Trust Agreement was amended
by  a  Voting  Trust  Agreement dated May 27, 1998 that extended the term to May
26, 2008. During fiscal 2000 the trustees voted to terminate the Voting Trust.


NOTE 12--Shareholders' equity:

     In  December 1998, the Company completed a sale of 212,623 shares of common
stock,  resulting  in  proceeds to the Company of $1,687,500. In April 1999, the
Company  completed  a  public  offering  of  1,000,000  shares  of common stock,
resulting  in  net  proceeds, after deducting underwriting fees and other costs,
to  the  Company  of $9,534,618. In December 1999, the remaining 1994 debentures
($815,000) were converted into 285,250 shares of common stock.


                                       36


<PAGE>

                            RAVENSWOOD WINERY, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (Continued)

NOTE 13--Stock option and employee stock purchase plans:

   Stock option plan

     On  February 1, 1999, the Company's Board of Directors established the 1999
Equity  Incentive  Plan  to  provide  for  the grant of incentive stock options,
non-qualified  stock  options,  restricted  stock  awards  and other stock-based
awards   to   the   Company's   officers,   employees,   directors,  independent
contractors,  consultants, vendors and suppliers. No awards may be granted under
the  Plan  after  January 2009, but the vesting of awards previously granted may
extend beyond that date.

     Under  the  Equity  Incentive  Plan,  the  Company  is  authorized to grant
incentive  stock  options,  non-qualified stock options, restricted stock awards
and  other stock based awards for a total of 750,000 shares of common stock. The
stock  options  may  not  be  granted for less than the fair market value of the
common  stock  at  the  date  of grant. The stock options are exercisable over a
period  determined  by  the  Board  at  the time of grant, but not to exceed ten
years  after  the  date  they  are  granted. These options generally vest over a
five-year  period  from the date of grant and expire five to ten years after the
date of grant.

     The  per  share weighted average fair value of stock options granted during
the  fiscal  years  ended  June  30, 2000 and June 30, 1999 were $5.31 and $4.86
respectively.   These   amounts   were   determined   using   the  Black-Scholes
option-pricing  model, which values options based on the stock price at the date
of  grant,  the  expected  life  of  the option, the estimated volatility of the
stock,  expected  dividend  payments,  and  the risk-free interest rate over the
expected  life  of  the  option. The assumptions used in the Black-Scholes model
for  fiscal 2000 and 1999 were as follows: a weighted average expected life of 5
years;  an  expected volatility of common stock of 43.7% and 46.4% respectively;
and  weighted average risk-free interest rate of 5.24%and 5.08% respectively. No
dividend  yield  was used, as the Company has not paid dividends in the past and
does not anticipate paying dividends in the future.

     The  Company  applies  APB  No.  25  in  accounting for its stock plan and,
accordingly,  no  compensation  costs  have  been  recognized  in  the Company's
financial  statements  for incentive or non-qualified stock options granted. If,
under  SFAS  123,  the  Company  determined compensation costs based on the fair
value  at  the grant date for its stock options, the net income of $5,838,170 as
reported  for fiscal 2000 would compare to a pro forma net income of $5,424,716.
(Fiscal  1999  net  income of $3,903,466 would compare to a pro forma net income
of  $3,846,173).  Basic  and  diluted  earnings per share as reported for fiscal
2000  of  $1.24  and  $1.19,  respectively, would compare to pro forma basic and
diluted  earnings per share of $1.15 and $1.11, respectively. (Basic and diluted
earnings   per   share   as  reported  for  fiscal  1999  of  $1.04  and  $0.96,
respectively,  would  compare  to pro forma basic and diluted earnings per share
of  $1.02 and $0.94, respectively). The Equity Incentive Plan was established in
fiscal 1999 and had no effect on fiscal 1998 net income or earnings per share.


                                       37


<PAGE>

                            RAVENSWOOD WINERY, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (Continued)

<TABLE>
     A  summary  of  the status of the Equity Incentive Plan as of June 30, 2000
and changes during the fiscal year then ended are presented below:


<CAPTION>
                                                                           Weighted
                                                          Number of        Average
                                                            Shares      Exercise Price
                                                         -----------   ---------------
<S>                                                      <C>           <C>
Outstanding at June 30, 1998 ...........................       --          $  --
Granted (weighted average fair value of $4.86) .........   280,000          10.88
Exercised ..............................................       --             --
Forfeited ..............................................      (500)         10.50
                                                           -------
Outstanding at June 30, 1999 ...........................   279,500          10.88
Granted (weighted average fair value of $5.31) .........   204,750          11.63
Exercised ..............................................       --             --
Forfeited ..............................................    (1,000)         10.50
                                                           -------
Outstanding at June 30, 2000 ...........................   483,250          11.20
                                                           -------
Options exercisable at June 30, 2000 ...................    55,700        $ 10.88
                                                           =======        =======
</TABLE>

     The  Company  granted  100,000  options in fiscal 2000 whose exercise price
was  greater  than  its  market price on the date of grant. The weighted average
fair  value  of  these  options  was $5.16. No option was granted in fiscal 2000
whose exercise price was less than its market price on the date of grant.

<TABLE>
     The  following table summarizes information about stock options outstanding
at June 30, 2000:

<CAPTION>
                                Options Outstanding                    Options Exercisable
                    --------------------------------------------   ---------------------------
                                       Weighted
                                       Average        Weighted                       Weighted
     Range of                         Remaining        Average                       Average
     Exercise           Number       Contractual     Exercise         Number         Exercise
      Prices         Outstanding         Life           Price       Exercisable       Price
-----------------   -------------   -------------   ------------   -------------   -----------
<S>                   <C>            <C>              <C>             <C>            <C>
$10.50 - $12.23       483,250        7.1 years        $ 10.88         55,700         $ 10.88
</TABLE>

     At  June 30, 2000, the outstanding stock options expire as follows: 100,000
in  April  2004;  178,500  in  April  2009;  100,000 in February 2005; 10,750 in
August 2009; 93,000 in February 2010; and 1,000 in June 2010.


   Employee Stock Purchase Plan

     On  February  1,  1999,  the  Company's  Board of Directors adopted and the
Company's  shareholders  approved  the  Employee Stock Purchase Plan with 50,000
shares  of  common  stock  available for issuance thereunder. The Plan, which is
intended  to qualify as an employee stock purchase plan under Section 423 of the
Internal  Revenue  Code,  provides  that all employees of the Company, including
directors  of  the Company who are employees, whose customary employment is more
than  20  hours  per  week  for  more than five months in any calendar year, are
eligible  to  participate in the Plan. Employees who would immediately after the
grant  own  5%  or more of the total combined voting power or value of the stock
of  the  Company  or  any  subsidiary  are not eligible to participate. Eligible
employees  may elect to have up to 10% of their earnings withheld and applied to
the  purchase  of  common  stock  at  a  price  equal to a minimum of 85% of the
average  market  price per share (as defined in the Plan) of the common stock on
either  the first day or the last day of the relevant offering period, whichever
is  lower. An employee may not purchase more than 500 shares in any one offering
period.  The  Company  issued  3,177  shares  of  common stock under the Plan in
fiscal 2000 (no shares of common stock were issued in fiscal 1999).


                                       38


<PAGE>

                            RAVENSWOOD WINERY, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (Continued)

NOTE 14--Commitments and contingencies:

     The  Company  leases certain warehouse space under noncancellable operating
leases  that  terminate  on  dates  ranging from September 2000 to January 2003.
Under  the  terms  of certain of the leases, rent is contingent on the amount of
bulk  wine  and/or  case goods stored at any given time and is adjusted annually
for increases in building operating costs.

     In   January   1999,  the  Company  entered  into  an  agreement  to  lease
approximately  20  acres  of  land  in  Sonoma County, California from Sandra D.
Donnell  and  Bruce  B.  Donnell,  the wife and brother-in-law, respectively, of
Justin  M.  Faggioli,  the  Company's  Executive Vice President. The Company has
built  a  new winery facility (the "Quarry Facility") on the leased property, to
expand  its  production  capacity.  The lease provides for monthly payments that
are  adjusted  annually  for  inflation (as defined) and for a lease term ending
December  31,  2032. In addition, the lease provides the Company with a right of
first  refusal  to purchase a portion of the property and a first option to rent
upon its expiration if specific conditions are met.

     Rental  expense  (including  contingent  rent)  was $920,571, $701,889, and
$468,616  for  fiscal  2000, 1999, and 1998, respectively. Minimum future rental
payments  for  each of the next five fiscal years and thereafter are as follows:
$445,000--fiscal    2001;    $448,000--fiscal   2002;   $248,000--fiscal   2003;
$107,000--fiscal 2004; $101,000--fiscal 2005; and $1,203,000 thereafter.

     The  Company  typically contracts with various growers and certain wineries
to  supply  its  grape and bulk wine requirements. While most of these contracts
call  for  prices  to  be  determined  by  market  conditions, several long-term
contracts provide for minimum grape or bulk wine purchase prices.

     The  Company  has  exposure to legal actions arising in the ordinary course
of  business.  In  the  opinion  of  management,  the Company has adequate legal
defenses  or  insurance  coverage  with respect to any such actions and does not
believe  that they will materially affect the Company's results of operations or
financial position.


NOTE 15--401(k) savings plan:

     The  Company  has  a  401(k)  savings  plan  that  is available to eligible
employees.  Employer  contributions  to  the  plan  are at the discretion of the
Board  of  Directors  and  amounted  to $65,762, $67,866, and $53,089 for fiscal
2000, 1999, and 1998 respectively.


NOTE 16--Earnings per share:

     Basic   earnings   per   share   represents   income  available  to  common
shareholders   divided   by   the  weighted  average  number  of  common  shares
outstanding  during  the measurement period, after giving retroactive effect to:
1)  shares  issued  under  a deferred compensation arrangement in July 1998 (see
Note  10);  and  2)  common  stock  issued in December 1998 (using the "treasury
stock  method") at prices below the initial public offering price of $10.50 (see
Note 12).

     Diluted  earnings  per  share  represents  the  income  available to common
shareholders  divided  by:  1)  the  weighted  average  number  of common shares
outstanding  during  the  measurement period, after giving retroactive effect to
a)  shares issued under a deferred compensation arrangement in July 1998; and b)
common  stock  issued  in  December  1998 (using the "treasury stock method") at
prices   below  the  initial  public  offering  price  of  $10.50;  and  2)  the
potentially  dilutive  common  shares  issuable  for  convertible debt and stock
options that were outstanding during the measurement period.


                                       39


<PAGE>

                            RAVENSWOOD WINERY, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (Continued)


<TABLE>
<CAPTION>
                                                           Fiscal year ended June 30,
                                              ----------------------------------------------------
                                                    2000               1999              1998
                                              ----------------   ----------------   --------------
<S>                                           <C>                <C>                <C>
BASIC
Average shares outstanding ................        4,712,478          3,696,801        3,005,625
Shares issued under deferred compensation
 arrangement[A] ...........................              --                 --           345,731
Shares issued in December 1998[B] .........              --              66,964          160,713
                                                ------------       ------------      -----------
Weighted average number of common shares
 outstanding ..............................        4,712,478          3,763,765        3,512,069
                                                ============       ============      ===========
Net income ................................     $  5,838,170       $  3,903,466      $   186,891
                                                ============       ============      ===========
Per share amount ..........................     $       1.24       $       1.04      $      0.05
                                                ============       ============      ===========
</TABLE>


<TABLE>
<CAPTION>
                                                                          Fiscal year ended June 30,
                                                             ----------------------------------------------------
                                                                   2000               1999              1998
                                                             ----------------   ----------------   --------------
<S>                                                               <C>                <C>              <C>
DILUTED
Average shares outstanding ...............................        4,712,478          3,696,801        3,005,625
Shares issued under deferred compensation
 arrangement[A] ..........................................              --                 --           345,731
Shares issued in December 1998[B] ........................              --              66,964          160,713
Net effect of potentially dilutive common stock
 issuable for convertible debentures .....................          293,752            407,480          302,751
Net effect of potentially dilutive common stock
 issuable for stock options ..............................            4,725                --               --
                                                               ------------       ------------      -----------
Weighted average number of shares and
 equivalents outstanding .................................        5,010,955          4,171,245        3,814,820
                                                               ============       ============      ===========
Net income ...............................................        5,838,170       $  3,903,466      $   186,891
Interest on convertible debt, net of tax benefit .........          114,374            112,836           49,305
                                                               ------------       ------------      -----------
Net income, after adding interest on debentures ..........     $  5,952,544       $  4,016,302      $   236,196
                                                               ============       ============      ===========
Per share amount .........................................     $       1.19       $       0.96      $      0.05
                                                               ============       ============      ===========
<FN>
------------
[A] Reflects  the  retroactive  effect  of  the  shares  issued under a deferred
    compensation arrangement in July 1998.

[B] Represents  the  retroactive  effect  using  the "treasury stock method" for
    common  stock  issued  in  December  1998 at prices below the initial public
    offering price.
</FN>
</TABLE>


NOTE 17--Supplemental cash flow information:

     Cash   paid  for  interest,  net  of  amounts  capitalized,  was  $875,265,
$542,127,  and  $484,670  for  the  fiscal  years ended June 30, 2000, 1999, and
1998,  respectively.  Cash paid for income taxes was $3,645,000, $2,275,000, and
$1,660,344   for  the  fiscal  years  ended  June  30,  2000,  1999,  and  1998,
respectively.


                                       40


<PAGE>

                            RAVENSWOOD WINERY, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (Continued)

<TABLE>
     A summary of non-cash investing and financing information is as follows:


<CAPTION>
                                                                Fiscal year ended June 30,
                                                      ----------------------------------------------
                                                           2000             1999            1998
                                                      --------------   --------------   ------------
<S>                                                   <C>              <C>              <C>
Plant and equipment purchased with capitalized
 leases and notes payable .........................    $ 1,509,476      $ 1,778,569      $ 241,086
                                                       ===========      ===========      =========
Construction in progress acquired by issuing
 convertible debentures and common shares to
 related parties ..................................    $       --       $   283,511      $     --
                                                       ===========      ===========      =========
Convertible debentures redeemed for common
 shares ...........................................    $   815,000      $    50,000      $     --
                                                       ===========      ===========      =========
Convertible debentures issued by reclassifying
 note and interest payable to shareholder .........    $       --       $    56,250      $     --
                                                       ===========      ===========      =========
</TABLE>

NOTE 18--Comprehensive income:

     In  June 1997, the Financial Accounting Standards Board issued Statement of
Financial  Accounting  Standards No. 130 - Reporting Comprehensive Income ("SFAS
130").  SFAS  130  requires  the additional reporting of a new measure of income
which  takes into account certain elements otherwise recorded as part of equity.
For  all  years  presented,  the difference between net income and comprehensive
income   consists   of   the  changes  in  the  unrealized  gain  in  securities
available-for-sale included as part of the Company's equity.

<TABLE>
     The following is a reconciliation of net income and comprehensive income:


<CAPTION>
                                                            Fiscal year ended June 30,
                                                  ----------------------------------------------
                                                       2000             1999            1998
                                                  --------------   --------------   ------------
<S>                                               <C>              <C>              <C>
Net income ....................................    $ 5,838,170      $ 3,903,466      $ 186,891
Change in unrealized gain on available-for-sale
 securities ...................................         85,752              --             --
                                                   -----------      -----------      ---------
Comprehensive income ..........................    $ 5,923,922      $ 3,903,466      $ 186,891
                                                   ===========      ===========      =========
</TABLE>


                                       41


<PAGE>

                            RAVENSWOOD WINERY, INC.

                  NOTES TO FINANCIAL STATEMENTS -- (Continued)

NOTE 19--Quarterly Highlights (Unaudited):

<TABLE>
     Selected  highlights for each of the fiscal quarters during the years ended
June 30, 2000 and 1999 (in thousands, except per share data):

<CAPTION>
                                               1st           2nd           3rd           4th
                                             Quarter       Quarter       Quarter       Quarter
                                           -----------   -----------   -----------   -----------
<S>                                          <C>           <C>           <C>           <C>
Year ended June 30, 2000:
   Net sales ...........................     $ 7,692       $ 9,924       $ 8,127       $ 7,484
   Gross profit ........................       4,229         5,110         4,230         3,961
   Net income ..........................       1,498         1,780         1,317         1,243
   Earnings per share--Basic ...........        0.33          0.39          0.27          0.26
   Earnings per share--Diluted .........        0.31          0.36          0.27          0.25
Year ended June 30, 1999:
   Net sales ...........................     $ 5,962       $ 5,621       $ 4,961       $ 5,525
   Gross profit ........................       3,433         3,083         2,556         2,737
   Net income ..........................       1,217         1,068           756           862
   Earnings per share--Basic ...........        0.35          0.31          0.22          0.19
   Earnings per share--Diluted .........        0.32          0.28          0.21          0.18
</TABLE>

     Earnings  per  share calculations for each of the quarters are based on the
weighted  average  common  and  common  share  equivalents  outstanding for each
period,  and  the  sum  of  the  quarters  may  not  necessarily be equal to the
full-year earnings per share amount.


                                       42


<PAGE>

Item  8. Changes  in  and  Disagreements  with  Accountants  on  Accounting  and
         Financial Disclosure

     None.



                                    PART III


Item   9. Directors,   Executive   Officers,   Promoters  and  Control  Persons;
          Compliance with Section 16(a) of the Exchange Act

     Reference  is  made  to the information regarding Directors appearing under
the  caption  "Nominees  for  the  Board  of  Directors"  in  Ravenswood's proxy
statement  for  its  2000  annual  meeting  of  shareholders  to  be  mailed  to
shareholders  on  or about September 29, 2000, which information is incorporated
herein  by  reference;  and  to  the  information  under  the heading "Executive
Officers of the Company" in Part I hereof.


Item 10. Executive Compensation

     Reference   is   made  to  the  information  appearing  under  the  caption
"Executive  Compensation"  in  Ravenswood's  proxy statement for its 2000 annual
meeting  of  shareholders to be mailed to shareholders on or about September 29,
2000, is incorporated herein by reference.


Item 11. Security Ownership of Certain Beneficial Owners and Management

     Reference   is   made  to  the  information  appearing  under  the  caption
"Director's  and  Officer's Ownership of our common stock" in Ravenswood's proxy
statement  for  its  2000  annual  meeting  of  shareholders  to  be  mailed  to
shareholders  on  or  about  September  29,  2000,  is  incorporated  herein  by
reference.


Item 12. Certain Relationships and Related Transactions

     Reference  is  made to the information appearing under the caption "Certain
Transactions"  in  Ravenswood's  proxy  statement for its 2000 annual meeting of
shareholders  to  be  mailed  to shareholders on or about September 29, 2000, is
incorporated herein by reference.



                                    PART IV


ITEM 13. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

a. The following documents are filed as a part of this Form 10-KSB.

   1. Financial  Statements:  Reference  is  made  to  the Index to Consolidated
      Financial Statements under Item 7 in Part II of this Form 10-KSB.

   2. Financial  Statement  Schedules: Financial Statement schedules are omitted
      because  they  are  not applicable or the required information is shown in
      the financial statements or notes thereto.

   3. Exhibits:  The  Exhibits  listed under Item 14(c) are required by Item 601
      of  Regulation  S-B.  Each  management  contract  or  compensatory plan or
      arrangement  required  to  be  filed as an exhibit to this Form 10-KSB has
      been identified.

b.  Reports on Forms 8-K

     On  June  20, 2000, the Registrant filed a Report on Form 8-K under Item 5,
relating to the termination of the Ravenswood Voting Trust.

     (c) Exhibits

                                       43


<PAGE>

<TABLE>
     The exhibits listed below are filed or incorporated by reference herein.

<CAPTION>
Exhibit
Number                                        Description of Document
------                                        -----------------------
<S>        <C>
  3.1      Amended and Restated Articles of Incorporation of Ravenswood Winery, Inc., filed as ex-
           hibit 3.1 to our Registration Statement on Form SB-2 filed with the Commission on Febru-
           ary 4, 1999 and incorporated herein by this reference.

  3.2      Amended and Restated Bylaws of Ravenswood Winery, Inc., filed as exhibit 3.2 to our
           Registration Statement on Form SB-2 filed with the Commission on February 4, 1999 and
           incorporated herein by this reference.

  4.1      Specimen Stock Certificate, filed as exhibit 4.1 to amendment no. 2 to our Registration
           Statement on Form SB-2 filed with the Commission on April 2, 1999 and incorporated
           herein by this reference.

 10.1      1999 Equity Incentive Plan for Ravenswood Winery, Inc., filed as exhibit 10.1 to our Regis-
           tration Statement on Form SB-2 filed with the Commission on February 4, 1999 and incor-
           porated herein by this reference.*

 10.2      Employee Stock Purchase Plan for Ravenswood Winery, Inc., filed as exhibit 10.2 to our
           Registration Statement on Form SB-2 filed with the Commission on February 4, 1999 and
           incorporated herein by this reference.*

 10.3      Form of Indemnification Agreement for Ravenswood Winery, Inc., filed as exhibit 10.3 to
           our Registration Statement on Form SB-2 filed with the Commission on February 4, 1999
           and incorporated herein by this reference.

 10.4      Revolving Line of Credit Promissory Note and Agreement with Pacific Coast Farm Credit
           Services, ACA, dated as of April 1, 1998, filed as exhibit 10.4 to our Registration State-
           ment on Form SB-2 filed with the Commission on February 4, 1999 and incorporated
           herein by this reference.

 10.5      Revolving Equity Line of Credit Promissory Note and Loan Agreement with Pacific Coast
           Farm Credit Services, ACA, dated as of April 8, 1998, filed as exhibit 10.5 to our Registra-
           tion Statement on Form SB-2 filed with the Commission on February 4, 1999 and incorpo-
           rated herein by this reference.

 10.6      Notes payable from Ravenswood Winery, Inc. to W. Reed Foster, filed as exhibit 10.6 to
           our Registration Statement on Form SB-2 filed with the Commission on February 4, 1999
           and incorporated herein by this reference.

 10.7      Notes payable from Ravenswood Winery, Inc. to Joel E. Peterson and notes payable from
           Joel E. Peterson to Ravenswood Winery, Inc.

 10.8      Quarry Winery Lease Agreement, dated as of January 1, 1999, filed as exhibit 10.8 to our
           Registration Statement on Form SB-2 filed with the Commission on February 4, 1999 and
           incorporated herein by this reference. Exhibit Number Description of Document

 10.9      Stock Agreement and Amendment of Voting Trust by and between Ravenswood Winery,
           Inc. and W. Reed Foster effective as of July 1, 1998 and note payable from W. Reed Fos-
           ter to Ravenswood Winery, Inc., filed as exhibit 10.9 to our Registration Statement on
           Form SB-2 filed with the Commission on February 4, 1999 and incorporated herein by this
           reference.

 10.11     Form of Convertible Subordinated Debenture dated as of December 1998, filed as exhibit
           10.11 to amendment no. 1 to our Registration Statement on Form SB-2 filed with the Com-
           mission on March 18, 1999 and incorporated herein by this reference.

 10.12     Marketing, Sales Agency and Administrative Services Agreement between Ravenswood
           Winery, Inc. and Harvest Wines, Inc., filed as exhibit 10.12 to our Registration Statement
           on Form SB-2 filed with the Commission on February 4, 1999 and incorporated herein by
           this reference.

 11.1      Statement of Computation of Earnings Per Share.

 23.1      Consent of Odenberg, Ullakko, Muranishi & Co. LLP.

 25.1      Power of Attorney (see p. 28).

 27.1      Financial Data Schedule.
<FN>
----------------
* Management contract or compensatory plan or arrangement.
</FN>
</TABLE>

                                       44

<PAGE>

                                  SIGNATURES

     Pursuant  to  the  requirements  of  Section  13 or 15(d) of the Securities
Exchange  Act  of  1934,  the issuer has duly caused this report to be signed on
its  behalf by the undersigned, thereunto duly authorized on September 27, 2000.




                                        RAVENSWOOD WINERY, INC.



                                        /s/ W. Reed Foster
                                        ----------------------------------------
                                        W. Reed Foster, Chairman of the Board
                                        and Chief Executive Officer




                                        /s/ Callie S. Konno
                                        ----------------------------------------
                                        Callie S. Konno, Chief Financial
                                        Officer, Treasurer and Director
                                        (Principal Financial Officer)


                               POWER OF ATTORNEY

     KNOW  ALL  MEN  BY THESE PRESENTS, that each person whose signature appears
below  constitutes  and  appoints  W.  Reed  Foster, Joel E. Peterson, Justin M.
Faggioli  and  Callie  S. Konno, and each of them, such person's true and lawful
attorneys-in-fact   and  agents,  each  with  full  power  of  substitution  and
resubstitution,  for  such person and in such person's name, place and stead, in
any  and  all capacities, for such person in any and all capacities, to sign any
amendments  to  this  Report  on Form 10-KSB and to file the same, with exhibits
thereto  and  other  documents  in connection therewith, with the Securities and
Exchange   Commission,   hereby   ratifying   and   confirming   all  that  said
attorney-in-fact,  or  such attorney-in-fact's substitute or substitutes, may do
or cause to be done by virtue hereof.


                                       45


<PAGE>

<TABLE>
     PURSUANT  TO  THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT  HAS  BEEN  SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE ISSUER
AND IN THE CAPACITIES AND ON THE DATE INDICATED.

<CAPTION>
           Signature                                Title                            Date
--------------------------------  ----------------------------------------   -------------------
<S>                               <C>                                        <C>
        /s/ W. Reed Foster        Chairman of the Board and Chief            September 27, 2000
--------------------------------  Executive Officer (Principal Executive
         W. Reed Foster           Officer)

       /s/ Joel E. Peterson       President, Winemaker and Director          September 27, 2000
-------------------------------
        Joel E. Peterson

      /s/ Justin M. Faggioli      Executive Vice President, Secretary        September 27, 2000
--------------------------------  and Director
       Justin M. Faggioli

        /s/ Callie S. Konno       Chief Financial Officer, Treasurer and     September 27, 2000
--------------------------------  Director (Principal Financial and
        Callie S. Konno           Accounting Officer)

        /s/ James F. Wisner       Director                                   September 27, 2000
--------------------------------
        James F. Wisner

    /s/ Robert E. McGill, III     Director                                   September 27, 2000
--------------------------------
       Robert E. McGill, III

        /s/ John D. Nichols       Director                                   September 27, 2000
--------------------------------
        John D. Nichols
</TABLE>

                                       46


<PAGE>

                      CONSENT OF INDEPENDENT ACCOUNTANTS

     We  hereby  consent  to  the incorporation by reference in the Registration
Statement  on  Form  S-8  of Ravenswood Winery, Inc. (File No. 333-85735) of our
report  dated  August  11,  2000,  on  our audits of the financial statements of
Ravenswood  Winery, Inc. as of June 30, 2000 and 1999 and for the three years in
the period ended June 30, 2000, which report is included in this 10-KSB.




Odenberg, Ullakko, Muranishi & Co. LLP
San Francisco, California




September 28, 2000