SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.

                                 FORM 10-Q


[x]  QUARTERLY   REPORT  PURSUANT  TO  SECTION  13  OR  15(d)  OF  THE
     SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1998
 
                                       OR

[ ]  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 - 1653

                              GENESEE CORPORATION
          (Exact name of registrant as specified in its charter)

 STATE OF NEW YORK                                       16-0445920
 (State or other jurisdiction of                       (I.R.S. Employer
  incorporation or organization)                        Identification No.)

 445 St. Paul Street, Rochester, New York                14605
 (Address of principal executive offices)                (Zip Code)

Registrant's telephone number, including area code   (716)  546-1030

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


As of the  date of  this  report,  the  Registrant  had the  following
shares of common stock outstanding:

                                       Number of Shares
                Class                  Outstanding


      Class A Common Stock (voting),            209,885
        par value $.50 per share


      Class B Common Stock (non-voting),      1,408,194
        par value $.50 per share
<PAGE>

                      GENESEE CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        January 31, 1998 and May 3, 1997
<TABLE>
<S>                                                                                  <C>                      <C>    
                                                                                      UNAUDITED                AUDITED
(Dollars in Thousands)                                                              January 31, 1998         May 3, 1997

ASSETS
     Current assets:
         Cash and cash equivalents                                                     $  2,559                4,521
         Marketable securities available for sale                                        17,078               32,627
         Trade accounts receivable, less allowance for doubtful receivables
            of $426 at January 31, 1998; $408 at May 3, 1997                             10,321               11,037
         Inventories, at lower of cost (first-in, first-out) or market                   15,269               13,957
         Deferred income tax assets                                                         760                  760
         Other current assets                                                             1,523                1,219
                                                                                       
            Total current assets                                                         47,510               64,121

     Net property, plant and equipment                                                   34,910               32,986
     Investment in and notes receivable from unconsolidated real estate partnerships      4,906                4,949
     Investments in direct financing and leveraged leases                                33,684               32,144
     Goodwill                                                                             9,308                 -
     Other assets                                                                         4,827                2,729
                                                                                      
            Total assets                                                                135,145              136,929
                                                                                     

LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities:
         Accounts payable                                                                 8,157                9,611
         Income taxes payable                                                               392                  932
         Federal and state beer taxes payable                                               940                2,029
         Accrued expenses and other                                                       8,518                6,395
                                                                                       
            Total current liabilities                                                    18,007               18,967

     Deferred income tax liabilities                                                      8,657                8,789
     Accrued postretirement benefits                                                     15,515               15,515
     Mortgage payable                                                                       541                  -
     Other liabilities                                                                      344                  413
                                                                                      
            Total liabilities                                                            43,064               43,684

     Minority interests in consolidated subsidiaries                                      2,120                1,690
     Shareholders' equity:
         Common stock Class A                                                               105                  105
         Common stock Class B                                                               753                  753
         Additional paid-in capital                                                       5,842                5,834
         Retained earnings                                                               86,322               87,720
         Unrealized gain on marketable securities, net of income taxes                      414                  648
         Less treasury stock, at cost                                                     3,475                3,505
                                                                                      
                                                                                     
            Total shareholders' equity                                                   89,961               91,555
                                                                                      

            Total liabilities and shareholders' equity                               $  135,145              136,929
                                                                                      
         See accompanying notes to consolidated financial statements.

                                                                                            
</TABLE>
<PAGE>
                                                              

                GENESEE CORPORATION AND CONSOLIDATED SUBSIDIARIES
                             CONSOLIDATED STATEMENTS
                        OF EARNINGS AND RETAINED EARNINGS
           Thirteen Weeks Ended January 31, 1998 and January 25, 1997
<TABLE>

(Dollars in Thousands,
Except Per Share Data)
<S>                                                                       <C>                        <C>  
                                                                                      UNAUDITED
                                                                          1998                        1997

Revenues                                                               $ 42,560                      44,644

         Federal and state beer taxes                                     6,701                       9,315
                                                                    
Net revenues                                                             35,859                      35,329

          Cost of sales                                                  28,877                      27,557
                                                                     
Gross profit                                                              6,982                       7,772

           Selling, general and administrative expenses                   8,532                       8,242
                                                                     
Operating loss                                                           (1,550)                       (470)

          Investment income                                               1,336                       1,120
          Other income / (expense), net                                     (73)                        150
          Interest of minority partners in earnings of
              consolidated subsidiaries                                    (199)                       (154)
                                                                     

Earnings / (loss) before income taxes                                      (486)                        646

         Income taxes                                                      (139)                        232
                                                                     
Net earnings / (loss)                                                     (347)                        414
Basic and Diluted earnings / (loss) per share                              (.21)                        .26

Retained earnings at beginning of period                                 86,669                      87,015

Retained earnings at end of period                                     $ 86,322                      87,429
                                                                    

See accompanying notes to consolidated financial statements.


</TABLE>
<PAGE>
                                                              

                GENESEE CORPORATION AND CONSOLIDATED SUBSIDIARIES
                             CONSOLIDATED STATEMENTS
                        OF EARNINGS AND RETAINED EARNINGS
          Thiry Nine Weeks Ended January 31, 1998 and January 25, 1997
<TABLE>

(Dollars in Thousands,
Except Per Share Data)                                                           UNAUDITED
<S>                                                                        <C>              <C> 
                                                                           1998             1997

Revenues                                                               $ 143,440          143,508

         Federal and state beer taxes                                     24,721           30,780
                                                                     

Net revenues                                                             118,719          112,728

          Cost of sales                                                   91,965           85,881
                                                                       

Gross profit                                                              26,754           26,847

           Selling, general and administrative expenses                   28,042           26,010
                                                                       

Operating income                                                          (1,288)             837

          Investment income                                                2,725            2,252
          Other income / (expense), net                                     (233)             292
          Interest of minority partners in earnings of
              consolidated subsidiaries                                     (582)            (503)
                                                                       
 
Earnings before income taxes                                                 622            2,878

         Income taxes                                                        322            1,036
                                                                      

Net earnings                                                                 300            1,842
Basic and Diluted earnings per share                                        0.18             1.14 

Retained earnings at beginning of period                                   87,720           87,285

         Less: Dividends - $1.05 per share in 1998
                  and $1.05 per share in 1997                              1,698            1,698
                                                                      

Retained earnings at end of period                                      $ 86,322           87,429
                                                                      

See accompanying notes to consolidated financial statements.


</TABLE>

<PAGE>
                                                                
                      GENESEE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
          Thirty Nine Weeks Ended January 31, 1998 and January 25, 1997
<TABLE>

                                                                                          UNAUDITED
<S>                                                                                  <C>          <C> 
(Dollars in thousands)                                                               1998         1997

Cash flows from operating activities:
    Net earnings                                                                    $ 300        1,842
    Adjustments to reconcile net income to net
      cash provided by operating activities:
        Depreciation and amortization                                               4,985        3,549
        Other                                                                         599          285
    Changes in non-cash assets and liabilities:
        Trade accounts receivable                                                     999        1,964
        Inventories                                                                  (932)      (1,024)
        Other assets                                                                  166           49
        Accounts payable                                                           (1,589)        (850)
        Accrued expenses and other                                                  1,079        1,790
        Income taxes payable                                                         (540)         480
        Federal and state beer taxes                                               (1,089)      (1,328)
        Other liabilities                                                             (69)         (23)
               
               Net cash provided by operating activities                            3,909        6,734
               

Cash flows from investing activities:
    Purchase of Freedom Foods, net of cash acquired                               (11,060)         -
    Capital expenditures                                                           (5,170)      (6,024)
    Sales of marketable securities                                                 29,816       11,694
    Purchases of marketable securities and other investments                      (16,133)      (7,493)
    Investments in and advances to unconsolidated real
       estate investments, net of distributions                                        43          121
    Net investment in direct financing and leveraged leases                        (1,540)      (3,807)
    Withdrawals by minority interest                                                 (152)        (202)
               
               Net cash used in investing activities                               (4,196)      (5,711)
               

Cash flows from financing activities:
    Principle payments on mortgage payable                                            (15)           -
    Payment of dividends                                                           (1,698)      (1,698)
    Proceeds from excersise of stock options                                           38           40
               
               Net cash used in financing activities                               (1,675)      (1,658)
               

Net decrease in cash and cash equivalents                                          (1,962)        (635)

Cash and cash equivalents at beginning of the year                                  4,521        2,560

        
        Cash and cash equivalents at end of the period                            $ 2,559        1,925
        

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


<PAGE>


                               GENESEE CORPORATION


Notes to Consolidated Financial Statements


NOTE (A)   The   Corporation's   consolidated   financial   statements
           enclosed  herein are  unaudited  with the  exception of the
           Consolidated  Balance Sheet at May 3, 1997 and,  because of
           the  seasonal  nature  of  the  business  and  the  varying
           schedule of its special  sales  efforts,  these results are
           not  necessarily  indicative  of the results to be expected
           for the entire  year.  In the  opinion of  management,  the
           interim  financial   statements  reflect  all  adjustments,
           consisting  of  only  normal  recurring  items,  which  are
           necessary  for a fair  presentation  of the results for the
           periods presented.  The accompanying  financial  statements
           have  been  prepared  in  accordance   with  GAAP  and  SEC
           guidelines  applicable  to interim  financial  information.
           These  statements  should be reviewed in  conjunction  with
           the annual  report to  shareholders  for the year ended May
           3, 1997.

NOTE (B)   Inventories are summarized as follows:
<TABLE>
<S>                                                       <C>                         <C>
                                                                     Dollars in thousands
                                                           January 31, 1998            May 3, 1997

           Finished goods                                         $   5,729           5,250
           Goods in process                                           3,532           2,301
           Raw materials, containers and packaging supplies           6,008           6,406
                Total inventories                                  $ 15,269          13,957
</TABLE>

NOTE (C)   During the third  quarter of fiscal  1998,  the  Corporation
           adopted   the   provisions   of   Statement   of   Financial
           Accounting  Standards  No.  128,  Earnings  Per Share  (SFAS
           128) effective  January 31, 1998.  This  statement  replaces
           the  presentation  of primary  earnings per share with Basic
           earnings  per  share,  which is  computed  by  dividing  the
           income  available  to common  shareholders  by the  weighted
           average  number  of  common  shares   outstanding   for  the
           period.   SFAS  128  also  requires  the   presentation   of
           Diluted  earnings per share,  which  reflects the  potential
           dilution that could occur if  securities or other  contracts
           to issue  common  stock were  exercised  or  converted  into
           common stock.   The effects of SFAS 128 are as follows:
<TABLE>
<S>                                                            <C>                <C> 
                                                              January 31, 1998    January 25, 1997
           Thirteen weeks ending:
           Basic and diluted earnings / (loss) per share             ($.21)            $.26
           Weighted average common shares outstanding            1,618,079        1,617,227
           Weighted average and common equivalent shares         1,622,607        1,621,472

           Thirty nine weeks ending:
           Basic and diluted earnings per share                       $.18            $1.14
           Weighted average common shares outstanding            1,617,923        1,617,058
           Weighted average and common equivalent shares         1,622,700        1,622,587
</TABLE>



<PAGE>

                            GENESEE CORPORATION


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

Comparison  of 13 weeks  ended  January  31,  1998 to 13  weeks  ended
January 25, 1997

      Consolidated  net revenues for the thirteen  weeks ended January 31,
1998 were $35.9  million,  an increase of $530,000 over  consolidated  net
revenues  reported  for the same  period  last year.  The higher  revenues
were due to increased sales by the Corporation's Foods Division.


      On a  consolidated  basis,  the  Corporation  reported a net loss of
$347,000,  or $.21 basic and diluted loss per share,  in the third quarter
this  year,  compared  to a net  profit  of  $414,000,  or $.26  basic and
diluted  earnings per share,  for the same period last year.  The loss for
the current  year was  attributable  to lower  sales and a larger  pre-tax
loss in the Corporation's brewing operations.

Genesee Brewing Company
 
      Genesee  Brewing  Company's  net  sales in the  third  quarter  were
$26.5  million,  a decrease of $2.5 million from last year's third quarter
net sales of $29.0  million.  Barrel  sales  (which  include  volume under
the  contract to brew and package  product for Boston Beer  Company)  were
down  43,900  barrels,  or  9.6%,  despite  a  1,635  barrel  increase  in
contract  brewing  volume.  Volume  under the contract to brew and package
product for Boston Beer  Company  increased  2.9% in the third  quarter to
57,550 barrels.

      The slower  growth under the Boston Beer  contract is primarily  the
result of  production  approaching  the maximum  level  required by Boston
Beer  Company to meet  consumer  demand in the markets  where  Boston Beer
Company  products  produced  by Genesee  Brewing  Company  are sold.  With
Boston  Beer  Company  reporting  that  sales of its  Samuel  Adams  craft
brands  declined  slightly in calendar 1997,  volume under Genesee Brewing
Company's   contract   with  Boston  Beer   Company  is  not  expected  to
significantly  exceed  current  levels.  Future  changes  in  volume  will
depend  on  consumer  demand  for  Boston  Beer  Company  products  and on
decisions made by Boston Beer Company  regarding  allocation of production
among its several sources of supply.
 
      As has been the case for several years,  Genesee  Brewing  Company's
core brands continued to experience  declining  volume.  Core brand volume
was down 30,000  barrels,  or 11.3% in the third quarter.  Within the core
brands,  higher-margin  returnable  glass  packages  and  24-can  packages
showed  the  largest  volume  declines.   These  declines  were  partially
offset by higher unit sales of lower  margin,  value-priced  30 and 36 can
"Multipaks".

      The beer  industry in the United States is highly  competitive.  The
industry  is  dominated  by three large  national  brewers who account for
approximately  83% of domestic  production:  Anheuser Busch,  Inc., Miller
Brewing Company and Coors Brewing  Company.  In comparison,  the volume of
malt  beverages  produced  by Genesee  Brewing  Company in  calendar  1997
represented  only  about 1% of  domestic  production.  During the past two
years,  per capita  consumption of malt beverages in the United States has
declined  and total  consumption  has grown by an  average of less than 1%
a year.  However,  consumption  of  domestically  produced malt  beverages
has  remained  basically  flat during this  period,  with the  increase in
overall  consumption  coming  largely from the  increasing  popularity  of
imported malt beverages.


<PAGE>

                         GENESEE CORPORATION


Item 2.      Management's   Discussion   and   Analysis  of  Financial
             Condition and Results of Operations (continued)

     During the past ten years, demand for many established domestic brands has
declined as consumers turned to the many new domestic brands, the wide
array of imported brands and the diverse range of beer styles offered by
the craft beer segment.

      As a result of these trends and the excess  capacity  that exists in
the  industry,  brewers  have  attempted  to  gain  market  share  through
reduced  pricing,   intensive  marketing  and  promotional  programs,  new
product   introductions   and   innovative   packaging.    Intense   price
competition has prevented any meaningful  price increases  during the past
two  years.  In  addition,  the  industry  has seen  increased  levels  of
price  discounting  and price  promotions  and a growth in  popularity  of
value priced 30 and 36 can Multipaks.

      The  competitive  position of smaller  brewers like Genesee  Brewing
Company  has also been  adversely  affected by the  consolidation  that is
occurring  within  the  distribution  tier of the  brewing  industry.  The
National Beer  Wholesalers  Association  estimates that the number of beer
wholesalers  in the United  States  declined by 14% between 1992 and 1997.
The effects of this  consolidation  have been aggravated by the aggressive
efforts of the large  national  brewers to obtain an  increasing  share of
the  distributor's  time and  attention  devoted to their  brands.  During
the past several  years,  the large  national  brewers have  implemented a
wide  range of  inducements,  incentives  and  contractual  terms to cause
their distributors to make a greater  commitment to their brands,  largely
at the expense of the brands of smaller  brewers,  like Genesee,  that are
also  sold  by  these  distributors.   These  developments  have  made  it
increasingly   difficult  for  Genesee   Brewing  Company  to  effectively
promote  and sell its brands in its core  markets  and to expand  sales of
its products in new or lower share markets.

      Growth  of  the  craft   beer   segment  of  the   industry   slowed
dramatically  in 1997,  especially  during  the  second  half of the year.
Over the  five-year  period  ended  December  31,  1996,  the  craft  beer
segment  grew at a  compounded  annual  rate of almost 40%.  However,  the
company  believes  the  growth  rate for the craft  beer  segment  fell to
single digit in 1997,  with several of the larger craft brewers  reporting
no gains or even  declining  sales.  The large  national  brewers have now
entered the craft  segment  with  craft-style  products of their own or by
acquiring  ownership  interests in existing  craft  brewers.  These trends
suggest  that the craft  segment  may  experience,  at best,  only  modest
growth  in the near term and that  competitive  pressures  in the  segment
will  continue  to  increase.   Reflecting  these  trends,  sales  of  the
company's  HighFalls  craft  brands  during  the third  quarter  were down
12,000 barrels, or 11.3%, compared to the same period a year ago.

      The  negative  volume  trends for both the  Genesee  core brands and
the  HighFalls  craft  brands,  together  with  the  unfavorable  shift in
product  mix  towards  lower-margin   contract  volume  and  Multipak  can
packages  contributed  to a $1.6  million  decline in gross profit for the
third quarter this year.  In addition,  intense  competition  has resulted
in price stagnation over the past two years,  further  depressing  Genesee
Brewing  Company's gross profit margins.  Genesee Brewing  Company's gross
profit  per barrel  declined  to $12.14  for the third  quarter  this year
compared  to  $14.56  for  the  same  period  last  year,  reflecting  the
continued price pressure and the unfavorable shift in package mix.

<PAGE>
 
                         GENESEE CORPORATION


Item 2.      Management's   Discussion   and   Analysis  of  Financial
             Condition and Results of Operations (continued)

      Selling,  general  and  administrative  expenses  were up $78,000 in
the third  quarter of fiscal  1998  compared to the same period last year.
The  increase  was due to the  timing of  planned  increases  in sales and
marketing  expenditures  -- primarily to support the  company's  HighFalls
brands and expansion of those brands into new markets.

      As a result of lower volume,  the  unfavorable  shift in product mix
and increased  sales and marketing  expenditures,  Genesee Brewing Company
showed an operating  loss of $2.6 million for the third  quarter this year
versus a $931,000 operating loss for the third quarter last year.

      The  competitive   conditions  in  the  brewing  industry  that  are
impacting the  performance of Genesee  Brewing Company are not expected to
abate  in  the  near  term.  In  response  to  these  conditions,  Genesee
Brewing  Company has reduced  planned  increases  in its fiscal 1998 sales
and marketing  budgets by $920,000  resulting in third quarter  savings of
$300,000   against  plan.  In  addition,   Genesee   Brewing   Company  is
proceeding   more  slowly  with  plans  to  expand   distribution  of  the
HighFalls  brands  into  additional  states  and to add new  brands to the
HighFalls   product  line.   Genesee   Brewing  Company  is  focusing  its
resources  on  stabilizing  sales and  improving  trends  for its  current
brand portfolio in existing  markets.  Among  initiatives  currently under
way is a television  and radio  advertising  campaign  being  developed to
promote the JW Dundee's Honey Brown Lager brand.

      In  addition  to  reducing  sales and  marketing  spending,  Genesee
Brewing  Company has  intensified  efforts to reduce its production  costs
and   administrative   expenses,   but  these  cost   reductions  did  not
materially  improve  third  quarter  performance  and it will be extremely
difficult to realize  additional cost reductions  sufficient to offset the
year to date operating loss of $5.4 million.

Foods Division
 
      Third  quarter  net  sales  for  the  Foods  Division  were  up $2.9
million,  or 50.4%,  over the prior year period.  Sales of bouillon  cubes
and powder,  resulting  from the May 1997  acquisition  of Freedom  Foods,
Inc.,  accounted  for $2.3 million of the Foods  Division's  overall sales
increase.  Sales and  operating  profit from the newly  acquired  bouillon
business generally met expectations in the third quarter.

      Sales of the Foods  Division's  existing private label product lines
increased  by $600,000  compared to the third  quarter  last year,  due to
higher iced tea sales and to a recently  completed  contract to supply dry
soup  mix to the  U.S.  Government.  Sales  revenue  under  this  contract
totaled $617,000 in the third quarter.

      Gross  profit for the quarter  was up $685,000  compared to the same
period  last  year  due  to  higher  sales  volume.   However,  the  Foods
Division's  gross  profit  margin as a  percent  of sales was lower in the
third  quarter  this  year  due  to  unfavorable  manufacturing  variances
arising  from the  ramping up of bouillon  production  to meet new orders.
In addition,  the Foods Division  experienced  higher outside  warehousing
costs.

      Selling,  general  and  administrative  expenses  were  up  $257,000
primarily  due to  increased  broker  commissions  as a result  of  higher
sales volume but also due to higher profit sharing and bonus accruals.


<PAGE>

                         GENESEE CORPORATION


Item 2.      Management's   Discussion   and   Analysis  of  Financial
             Condition and Results of Operations (continued)

      Due to continued  and  profitable  growth in existing  product lines
and the  acquisition  of the Freedom Foods  bouillon  business,  the Foods
Division  showed  operating  income  of  $465,000  for  the  quarter,   an
increase of approximately $427,000 compared to the same period last year.

Genesee Ventures
 
      Genesee  Ventures,  Inc., the  Corporation's  equipment  leasing and
real estate investment  subsidiary,  reported operating income of $739,000
for the third  quarter of fiscal 1998,  compared to $575,000 for the third
quarter of fiscal 1997.  Lease  revenues  were up $152,000 for the quarter
reflecting  continued growth in Genesee Ventures' leasing  portfolio.  The
performance  of Genesee  Ventures' real estate  investments  was generally
on plan for the third quarter and slightly ahead of last year.

Comparison  of 39 weeks ended  January 31, 1998 to 39 weeks ended  January
25, 1997
 
      Consolidated  year-to-date  net  revenues  were $118.7  million,  an
increase of $6.0  million  from the  consolidated  net  revenues of $112.7
million  reported  for the same  period  last year.  The  higher  revenues
were the result of increased sales by the Corporation's Foods Division.

      On a consolidated  basis,  the Corporation  reported net earnings of
$300,000,  or $.18 basic and  diluted  earnings  per share,  for the first
three  quarters of this year,  compared to net  earnings of $1.8  million,
or $1.14 basic and diluted  earnings  per share,  for the same period last
year.  The $1.5 million,  or $.96 per share,  decrease in net earnings was
primarily   attributable  to  a  decline  in  Genesee  Brewing   Company's
operating performance.

Genesee Brewing Company
 
      Genesee  Brewing  Company's net sales in the first three quarters of
fiscal  1998 were $90.4  million,  a decrease  of $4.0  million,  or 4.2%,
from the prior  year's net sales of $94.4  million.  Barrel  sales  (which
include  volume under the contract to brew and package  product for Boston
Beer  Company)  were down  46,000  barrels,  or 3.1%,  in the first  three
quarters of fiscal 1998.  Volume  under the Boston Beer  Company  contract
totaled 232,000 barrels  through  January,  compared to 184,000 barrels in
the same period last year, an increase of 46,000 barrels, or 25.4%.

      Sales of Genesee  Brewing  Company's  HighFalls craft brands were up
5,700  barrels,  or  1.8%,  over  the same  period  a year  ago.  However,
through the first nine months of fiscal  1998,  only one  HighFalls  brand
showed  increased  volume  relative to the prior year -- Honey Brown Lager
volume was up 1.2%.  Honey Brown Light,  a new product  introduced  in the
fourth quarter of fiscal 1997, has produced  incremental  volume in fiscal
1998,  but at lower than  projected  levels.  The slower growth rates this
year are  generally  consistent  with the trend for the craft beer segment
discussed above.

      Genesee  Brewing  Company's  established  core brands also continued
to show  negative  trends.  Core  brand  volume  during  the  first  three
quarters  was  down 11%  compared  to the same  period  last  year and the
package  mix  continued  to  shift  towards  lower-margin  30  and  36 can
"Multipaks".


<PAGE>

                         GENESEE CORPORATION


Item 2.      Management's   Discussion   and   Analysis  of  Financial
             Condition and Results of Operations (continued)

      These negative  volume trends and the  unfavorable  shift in product
mix  towards  lower-margin  contract  volume  and  Multipak  can  packages
contributed  to a $3.1  million  decline in gross  profit  this  year.  In
addition,  intense  competition has resulted in price  stagnation over the
past  two  years,  further  depressing  Genesee  Brewing  Company's  gross
profit margins.  Genesee Brewing Company's gross profit per barrel  declined
to $13.98  for the first  three  quarters  this year compared  to  $15.63
for  the  same  period  last  year,  reflecting  the continued price pressure
and the unfavorable shift in package mix.

      Selling,  general and  administrative  expenses were up $1.6 million
compared to the same period last year.  The  increase  was  primarily  due
to the timing of planned  increases  in sales and  marketing  expenditures
--  primarily to support the  company's  HighFalls  brands which  included
expansion  into  new  markets.  Much of this  fiscal  year's  selling  and
marketing  spending  has been front loaded into the early part of the year
in an effort to spur sales  during the  critical  summer  selling  season.
Last year's expenditures were greater in the latter portion of the year.

      Due to  lower  volume,  an  unfavorable  shift  in  product  mix and
increased  sales  and  marketing  expenditures,  Genesee  Brewing  Company
showed an operating  loss of $5.4 million for the first three  quarters of
this year, versus a $649,000 operating loss last year.

      The  competitive   conditions  in  the  brewing  industry  that  are
impacting the  performance of Genesee  Brewing Company are not expected to
abate  in  the  near  term.  In  response  to  these  conditions,  Genesee
Brewing  Company has reduced  planned  increases  in its fiscal 1998 sales
and  marketing  budgets  resulting  in year to date  savings  of  $920,000
against  plan.  Despite  these  reductions,   total  sales  and  marketing
expenses  of  $18.6  million  year  to  date   represent  an  increase  of
approximately $1.9 million over the prior year.

      In addition to reducing  sales and marketing  spending,  the company
has also  redoubled  its  efforts  to  reduce  its  production  costs  and
administrative  expenses.  However,  to date,  these cost  reductions have
not  materially  improved  Genesee  Brewing  Company's  bottom line and it
will  be  extremely   difficult  to  realize  additional  cost  reductions
sufficient to offset the year-to-date operating loss of $5.4 million.

Foods Division
 
      Net sales for the Foods  Division  were  $26.1  million in the first
three  quarters of fiscal  1998,  compared  to $16.5  million for the same
period last year.  The  increase in net sales of $9.6  million,  or 58.2%,
for the first half was attributable to the bouillon  business  acquired in
May 1997, a new short term government  soup contract and continued  growth
in iced tea sales.

      The Foods  Division  reported  operating  income of $2.2 million for
the first  three  quarters  this year,  compared  to  operating  income of
$174,000  for the same  period  last year.  The $2.0  million  increase in
operating  income was due to the increased  sales volume and higher profit
margins of the bouillon business.

 

<PAGE>

                          GENESEE CORPORATION


Item 2.      Management's   Discussion   and   Analysis  of  Financial
             Condition and Results of Operations (continued)

Genesee Ventures

      Genesee  Ventures,  Inc., the  Corporation's  equipment  leasing and
real  estate  investment  subsidiary,  reported  operating  income of $2.1
million for the first  three  quarters  of fiscal  1998,  compared to $1.8
million  for the first  three  quarters of fiscal  1997.  The  increase in
operating  income was  primarily  attributable  to higher  lease  revenues
from  Cheyenne  Leasing.  However,  the volume of equipment  leases closed
by Cheyenne  Leasing  during the first  three  quarters of fiscal 1998 was
lower than expected,  reflecting  the general  effects of a strong economy
and low  interest  rates,  which have  caused  increased  competition  and
lower pricing within the leasing industry.

LIQUIDITY AND CAPITAL RESOURCES

      Cash,  cash  equivalents,  and marketable  securities  totaled $19.6
million at January 31,  1998,  compared  to $37.1  million at May 3, 1997.
The decrease was primarily due to the internally funded
acquisition   of  Freedom   Foods  for  $11.3  million  in  May  1997.  In
addition,  cash was  used to  finance  an  inventory  build  by the  Foods
Division.  Inventories  at January 31, 1998 were $1.3 million  higher than
the balances  reported at May 3, 1997,  primarily as a result of increased
sales by the  Foods  Division  and due to the  higher  inventory  balances
needed to maintain  service  levels for bouillon  customers.  In addition,
capital  spending  was up in the first three  quarters of this fiscal year
as  a  result  of  site  development  work  and  new  equipment  purchases
necessary  for  moving  bouillon  production  from  Florida  to the  Foods
Division  facility  in  Albion,  New  York  and  due to  additional  plant
improvements made by Genesee Brewing Company.

      Trade  receivables  at January 31, 1998 were $716,000 lower than the
balances reported at May 3, 1997.  Genesee Brewing  Company's  receivables
were  lower  due  to  seasonality  and  lower  sales  volume.   The  Foods
Division's receivable balances increased due to higher sales volume.

      The   Corporation   has  a  strategy   to  search  for  and  develop
opportunities  which will contribute to the  Corporation's  future growth.
The  Corporation  plans to continue to use its strong  financial  position
to further  diversify  its  business  in order to broaden  its profit base
and contribute to the continued long-term success of the Corporation.

      The Corporation  expects to fund future capital needs  internally as
it has in the past.  With  respect to real estate and  equipment  leasing,
such  investments  may also include a debt component,  generally  obtained
on a  non-recourse  basis.  Any future  acquisitions  are  expected  to be
financed primarily with cash but may also involve debt financing.

      In  November  1997,  the New York  Department  of  Environmental
Conservation  denied  a  request  by  Genesee  Brewing  Company  for a
variance from  compliance  with New York  regulations  governing  bulk
storage of  chemicals  used to clean and  sanitize  brewing  equipment
and refillable  bottles.  An engineering  study is currently under way
to  determine  the extent and cost of any  modifications,  upgrades or
new  equipment  needed to achieve  compliance  with the chemical  bulk
storage requirements, which become effective in December 1999.

<PAGE>

                         GENESEE CORPORATION


Item 2.      Management's   Discussion   and   Analysis  of  Financial
             Condition and Results of Operations (continued)

     The  Corporation has developed a plan in the past year to fully address the
year  2000  compliance  and it does  not  expect  that the  cost to  modify  its
information  technology   infrastructure  will  be  material  to  its  financial
condition or results of  operations.  The  Corporation  does not  anticipate any
material  disruption  in  its  operations  as a  result  of any  failure  by the
Corporation  to be in  compliance.  In the event  that any of the  Corporation's
significant  suppliers or customers do not  successfully and timely achieve Year
2000  compliance,  the  Corporation's  business  or  operations  should  not  be
materially affected.

PART II.  OTHER INFORMATION


Item 6. Exhibits and Reports on Form 8-K

         (a) Exhibits.  No exhibits are being filed with this report.

         (b) Reports on Form 8-K.  The Corporation did not file any
             reports on Form 8-K during the quarter for which this
             report is filed.



<PAGE>

                          GENESEE CORPORATION

                                SIGNATURES


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


                               GENESEE CORPORATION



Date:   3/12/98             /s /Robert N. Latella
                       Robert N. Latella
                       Executive Vice President and Chief Operating Officer



Date:   3/12/98               /s /Edward J. Rompala
                        Edward J. Rompala
                        Vice President - Finance and Treasurer