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


                                    FORM 10-Q

(Mark One)

  [ X ]   Quarterly  Report  Pursuant  to Section 13 or 15(d) of the  Securities
          Exchange Act of 1934.  For the  quarterly  period  ended  December 31,
          2001.

                                       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: 333-74589


                          NATIONAL WINE & SPIRITS, INC.
             (Exact name of registrant as specified in its charter)


           Indiana                                       35-2064429
-------------------------------             ---------------------------------
(State or other jurisdiction of             (IRS Employer Identification No.)
 incorporation or organization)


P.O. Box 1602, 700 W. Morris Street, Indianapolis, Indiana           46206
----------------------------------------------------------           -----
       (Address of principal executive offices)                    (Zip Code)

                                 (317) 636-6092
                                 --------------
              (Registrant's telephone number, including area code)

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

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of February 8, 2002.

                Class                 Outstanding at February 8, 2002
                -----                 -------------------------------

            Common Stock,
            $.01 par value                     104,520 shares
               voting

            Common Stock,
            $.01 par value                   5,226,001 shares
              non-voting

<PAGE>

                          NATIONAL WINE & SPIRITS, INC.
                                Quarterly Report
                     For the period ended December 31, 2001


                                      INDEX


                                                                           Page
                                                                          Number
                                                                          ------

PART I.    FINANCIAL INFORMATION

Item 1.    Financial Statements

           Condensed Consolidated Balance Sheets
               December 31, 2001 and March 31, 2001.........................   3

           Condensed Consolidated Statements of Income
               Three Months Ended December 31, 2001 and 2000; Nine Months
               ended December 31, 2001 and 2000.............................   4

           Condensed Consolidated Statements of Cash Flows
               Nine Months Ended December 31, 2001 and 2000.................   5

           Notes to Condensed Consolidated Financial Statements.............   6


Item 2.    Management's Discussion and Analysis of Financial
           Condition and Results of Operations..............................  12


Item 3.    Quantitative and Qualitative Disclosures About
           Market Risk......................................................  20


PART II.   OTHER INFORMATION

Item 1.    Legal Proceedings................................................  21

Item 5.    Other Events.....................................................  21

Item 6.    Exhibits and Reports on Form 8-K.................................  21

           Signature........................................................  22

<PAGE>

<TABLE>
<CAPTION>
PART I.    FINANCIAL INFORMATION
Item 1.    Condensed Financial Statements


                                            NATIONAL WINE & SPIRITS, INC.
                                        CONDENSED CONSOLIDATED BALANCE SHEETS
                                               (Amounts in thousands)

                                                                            December 31, 2001        March 31, 2001
                                                                                (unaudited)             (Note 1)

<S>                                                                             <C>                    <C>
ASSETS
Current assets:
     Cash                                                                       $    3,313             $    4,094
     Accounts receivable, less allowances for doubtful accounts                     54,270                 39,001
     Inventory                                                                      93,729                 79,616
     Prepaid expenses and other                                                      4,528                  4,231
                                                                                ----------             ----------
Total current assets                                                               155,840                126,942

Property and equipment, net                                                         42,342                 43,734

Other assets
     Notes receivable                                                                  563                    811
     Cash surrender value of life insurance, net of loans                            3,198                  2,821
     Investment in Kentucky distributor                                              6,593                  6,609
     Investment in eSkye Solutions, Inc.                                               455                  1,471
     Intangible assets, net of amortization                                          8,087                  9,290
     Deferred pension costs                                                            487                    487
     Deposits and other                                                                 87                    125
                                                                                ----------             ----------
Total other assets                                                                  19,470                 21,614
                                                                                ----------             ----------
TOTAL ASSETS                                                                    $  217,652             $  192,290
                                                                                ==========             ==========
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable                                                           $   30,081             $   35,739
     Accrued payroll and payroll taxes                                               7,135                  6,913
     Excise taxes payable                                                            6,160                  5,401
     Other accrued expenses and taxes                                               12,794                  8,510
     Current maturities of long-term debt                                              ---                    571
                                                                                ----------             ----------
Total current liabilities                                                           56,170                 57,134

     Deferred pension liability                                                        487                    487
     Long-term debt                                                                132,989                110,000
                                                                                ----------             ----------
Total liabilities                                                                  189,646                167,621
                                                                                ----------             ----------
Stockholders' equity
     Voting common stock, $.01 par value                                                 1                      1
     Nonvoting common stock, $.01 par value                                             53                     53
     Additional paid-in capital                                                     25,009                 25,009
     Retained earnings (deficit)                                                     2,943                   (224)
                                                                                ----------             ----------
                                                                                    28,006                 24,839
     Notes receivable from stockholders, net                                           ---                   (170)
                                                                                ----------             ----------
Total stockholders' equity                                                          28,006                 24,669
                                                                                ----------             ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                      $  217,652            $   192,290
                                                                                ==========            ===========
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
                                                       - 3 -
<PAGE>

<TABLE>
<CAPTION>
PART I.    FINANCIAL INFORMATION
Item 1.    Condensed Financial Statements


                                    NATIONAL WINE & SPIRITS, INC.
                             CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                        (Amounts in thousands)
                                             (unaudited)


                                            Three Months Ended               Nine Months Ended
                                            ------------------               -----------------
                                       December 31,   December 31,      December 31,    December 31,
                                           2001          2000              2001            2000
                                       ------------   ------------      ------------    ------------
                                                       Restated                          Restated

<S>                                     <C>            <C>               <C>             <C>
Net product sales                       $ 203,490      $ 194,787         $ 518,056       $ 503,545
Distribution fees                           5,863          6,945            16,818          16,991
                                        ---------      ---------         ---------       ---------
Total revenue                             209,353        201,732           534,874         520,536
Cost of products sold                     164,089        157,746           415,603         405,024
                                        ---------      ---------         ---------       ---------
Gross profit                               45,264         43,986           119,271         115,512
Operating expenses:
  Warehouse and delivery                   10,112         10,188            30,114          29,834
  Selling                                  12,178         12,228            36,036          36,354
  Administrative                           11,167         10,252            32,319          29,461
                                        ---------      ---------         ---------       ---------
Total operating expenses                   33,457         32,668            98,469          95,649
                                        ---------      ---------         ---------       ---------
Income from operations                     11,807         11,318            20,802          19,863
Interest expense:
  Related parties                             (58)          (120)             (208)           (362)
  Third parties                            (2,899)        (3,348)           (8,800)         (9,719)
                                        ---------      ---------         ---------       ---------
                                           (2,957)        (3,468)           (9,008)        (10,081)
Other income (expense):
  Equity in earnings
    of Kentucky distributor                   324            275               389             359
  Equity in losses of eSkye                  (530)          (173)           (1,016)           (578)
  Rental and other income                     124             42               254              22
  Gain on sale of assets                        6            223                34           7,819
  Interest income                              50            166               241             583
                                        ---------      ---------         ---------       ---------
Total other income (expense)                  (26)           533               (98)          8,205
                                        ---------      ---------         ---------       ---------
Net income                              $   8,824      $   8,383         $  11,696       $  17,987
                                        =========      =========         =========       =========

<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
                                                - 4 -
<PAGE>
<TABLE>
<CAPTION>
PART I.    FINANCIAL INFORMATION
Item 1.    Condensed Financial Statements


                                      NATIONAL WINE & SPIRITS, INC.
                             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                         (Amounts in thousands)
                                               (Unaudited)


                                                                          Nine Months Ended
                                                                          -----------------
                                                               December 31, 2001      December 31, 2000
                                                               -----------------      -----------------
                                                                                          Restated

<S>                                                                <C>                   <C>
Operating activities
     Net income                                                    $   11,696            $   17,987
     Adjustments to reconcile net income to net cash
     provided (used) by operating activities:
       Depreciation of property and equipment                           4,949                 5,345
       Gain on sales of assets                                            (34)               (7,819)
       Amortization of intangible assets                                1,223                 1,438
       Equity in earnings of Kentucky distributor                        (389)                 (359)
       Equity in losses of eSkye                                        1,016                   578
       Loss on extinguishment of debt                                      32                   ---
       Changes in operating assets and liabilities
         Accounts receivable                                          (15,269)              (23,796)
         Inventory                                                    (14,113)              (17,673)
         Prepaid expenses and other                                      (297)                  618
         Accounts payable                                              (5,658)                1,323
         Accrued expenses and taxes                                     5,265                 4,254
                                                                   ----------            ----------
Net cash used by operating activities                                 (11,579)              (18,104)

Investing activities:
     Purchases of property and equipment                               (3,616)               (5,407)
     Investment in eSkye Solutions, Inc.                                  ---                (2,013)
     Proceeds from sale of assets                                          93                10,832
     Distributions from Kentucky distributor                              405                   429
     Purchases of intangible assets                                       (95)               (1,000)
     Decrease in deposits and other                                        38                     6
     Increase in cash surrender value of insurance                       (377)                 (243)
     Decrease in notes receivable                                         248                   235
                                                                   ----------            ----------
Net cash provided (used) by investing activities                       (3,304)                2,839

Financing activities:
     Proceeds of line of credit borrowings                            131,650               126,500
     Principal payments on line of credit borrowings                 (108,650)             (102,750)
     Principal payments on long-term debt                              (2,653)                 (875)
     Proceeds of borrowings from stockholder                              208                    51
     Repayments on borrowings from stockholders                           (50)                  ---
     Notes receivable from stockholders and others                      2,126                 1,551
     Distributions to stockholders                                     (8,529)               (8,822)
                                                                   ----------            ----------
Net cash provided by financing activities                              14,102                15,655
                                                                   ----------            ----------
Net increase (decrease) in cash                                          (781)                  390

Cash at beginning of period                                             4,094                 3,559
                                                                   ----------            ----------
Cash at end of period                                              $    3,313            $    3,949
                                                                   ==========            ==========


<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
                                                  - 5 -
<PAGE>
                          National Wine & Spirits, Inc.
              Notes To Condensed Consolidated Financial Statements
                                   (Unaudited)


1.   Nature of Business and Basis of Presentation

     The  unaudited  condensed  consolidated  financial  statements  include the
accounts  of  National  Wine &  Spirits,  Inc.  (NWS),  National  Wine & Spirits
Corporation  (NWSC),  NWS, Inc.  (NWSI),  NWS-Illinois,  LLC (NWS-LLC),  and NWS
Michigan,  Inc. (NWSM).  In November 2000, NWSM commenced doing business through
its  subsidiary,  National  Wine & Spirits,  LLC  (NWSM-LLC)  to sell  low-proof
alcohol and non-alcoholic products in the State of Michigan.  References to U.S.
Beverage (USB) relate to the operations of the Company's national import,  craft
and specialty beer marketing business performed by NWS-Illinois. All significant
intercompany   accounts  and   transactions   have  been   eliminated  from  the
consolidated  financial  statements.  Substantially all revenues result from the
sale of liquor, beer, and wine.

     Based in Indianapolis,  NWSC is a wholesale distributor of liquor and wines
throughout  Indiana.  Based in Chicago,  NWS-LLC is a wholesale  distributor  of
liquor, wines and beer throughout Illinois.  NWSM is a wholesale  distributor of
liquor  throughout  Michigan.  NWS performs  periodic credit  evaluations of its
customers' financial condition and generally does not require collateral. Credit
losses have been within management's expectations.

     The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally  accepted  accounting  principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation  S-X.  Accordingly,  they do not include all of the information
and footnotes required by accounting principles generally accepted in the United
States for complete  financial  statements.  In the opinion of  management,  all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair  presentation  have been  included.  Operating  results for the  nine-month
period ended  December 31, 2001 are not  necessarily  indicative  of the results
that may be expected for the year ending March 31, 2002.

     There is no provision  for federal or state  income taxes  reflected in the
financial statements because the stockholders have consented to NWS' election to
be taxed as an S  corporation  under the  applicable  provisions of the Internal
Revenue Code. NWS' income is taxable directly to its stockholders.

     The  balance  sheet at March 31,  2001 has been  derived  from the  audited
financial  statements  at that date but does not include all of the  information
and footnotes required by accounting principles generally accepted in the United
States  for  complete  financial  statements.  In  accordance  with APB 18,  the
historical results have been retroactively  presented as if the Company had been
accounting for the investment in eSkye  Solutions,  Inc. under the equity method
for all periods presented (Note 6).



                                     - 6 -
<PAGE>

     In June 2001, the Financial Accounting Standards Board issued Statements of
Financial  Accounting Standards No. 141, "Business  Combinations",  and No. 142,
"Goodwill and Other  Intangible  Assets",  effective for fiscal years  beginning
after December 15, 2001.  Under the new rules,  goodwill (and intangible  assets
deemed to have indefinite lives) will no longer be amortized but will be subject
to annual  impairment tests in accordance with the Statements.  Other intangible
assets will continue to be amortized over their useful lives.

     The Company is adopting the new rules on accounting  for goodwill and other
intangible  assets  effective  April 1, 2002.  The adoption of this statement is
expected to reduce annual amortization expense  approximately  $100,000.  During
fiscal 2003, the Company will perform the first of the required impairment tests
of goodwill and  indefinite  lived  intangible  assets.  The Company has not yet
determined  what the effect of these tests will be on its earnings and financial
position.

     FASB  Statement  No. 144,  "Accounting  for the  Impairment  or Disposal of
Long-Lived   Assets,"  which  requires  impairment  losses  to  be  recorded  on
long-lived  assets used in operations  when indicators of impairment are present
and the  undiscounted  cash flows  estimated to be generated by those assets are
less  than  the  assets'  carrying  amount.  Statement  144 also  addresses  the
accounting for expected  disposals of long-lived  assets. The Company will adopt
Statement  144 in the  first  quarter  of  fiscal  2003  and,  based on  current
circumstances, does not believe the effect of adoption will be material.

     For further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's Form 10-K dated June 29, 2001.

2.   Sale of Bottled Water Division

     Effective  June  5,  2000,  NWSC  sold  certain  of  its  licensed  brands,
trademarks  and trade  names of its bottled  water  division  for  approximately
$10,440,000.  NWSC  received  $9,960,000  for the sale of the assets at the sale
date,  and the  balance  of  $480,000  was  received  in  September  2000.  NWSC
recognized  a gain of  approximately  $7,524,000  from the sales of the  related
assets and liabilities.

3.   Inventory

     Inventory is comprised of the following:

                                  December 31, 2001         March 31, 2001
                                  -----------------         --------------

     Inventory at FIFO              $  104,295,000          $  89,377,000
     Less: LIFO reserve                 10,566,000              9,761,000
                                    --------------          -------------

                                    $   93,729,000          $  79,616,000
                                    ==============          =============


                                     - 7 -
<PAGE>

4.   Debt

<TABLE>
<CAPTION>
     Long-term debt is comprised of the following:

                                                  December 31, 2001       March 31, 2001
                                                  -----------------       --------------

<S>                                                 <C>                   <C>
Senior notes payable (A)                            $ 107,875,000         $ 110,000,000
Bank revolving line of credit (B)                      23,000,000                   ---
Notes payable to stockholders, net                      2,114,000                   ---
Term loan payable due 2002, including interest                ---               500,000
 Other                                                        ---                71,000
                                                    -------------         -------------
                                                      132,989,000           110,571,000
Less:  current maturities                                     ---               571,000
                                                    -------------         -------------
                                                    $ 132,989,000         $ 110,000,000
                                                    =============         =============
</TABLE>

     (A) On January 25,  1999,  the Company  issued  $110,000,000  of  unsecured
senior notes with a maturity of January 15,  2009.  Interest on the senior notes
is 10.125% and is payable semiannually. The Company used the net proceeds of the
senior notes  (approximately  $106,900,000)  to repay its  outstanding  bank and
other debt and amounts outstanding under its revolving credit facilities.

     The  bond   indenture   restricts  the  ability  of  the  Company  and  its
subsidiaries to incur additional indebtedness,  pay dividends, engage in mergers
or consolidations,  make capital  expenditures and otherwise restricts corporate
activities.

     On or after  January  15,  2004,  the Company may redeem some or all of the
senior notes at any time at stated  redemption  prices plus accrued interest and
liquidated damages.  Notwithstanding  the foregoing,  during the first 36 months
after  January  20,  1999,  the  Company  may redeem up to 33% of the  aggregate
principal  amount of the senior  notes at a redemption  price of 110.125%,  plus
accrued  interest and liquidated  damages,  with the net cash proceeds of one or
more public offerings of common stock of the Company.

     The Company  purchased  $2,125,000 of its senior notes from the open market
on September  28, 2001.  The notes were  purchased for  $2,082,500  plus accrued
interest of $46,617.  Related unamortized issuance costs of $74,391 were written
off due to the purchase of the senior notes.  The Company utilized its revolving
credit  facility to fund the purchase of the senior  notes.  The net loss on the
purchase of $32,000 is included in other income and expenses.



                                     - 8 -
<PAGE>

     (B) On January 25, 1999, the Company  entered into a credit  agreement that
provides a revolving line of credit for borrowings of up to $60,000,000  through
January 25, 2004.  Line of credit  borrowings  are limited to eligible  accounts
receivable plus eligible  inventories.  The credit agreement permits the Company
to elect an interest  rate based upon the  Eurodollar  rate or the higher of the
prime  lending rate or the federal funds  effective  rate plus 0.5%. At December
31, 2001,  $17,000,000  bears interest at 5.00% based on the prime rate pricing,
and $6,000,000 bears interest at 4.12% based on LIBOR based pricing. The Company
also pays a commitment  fee ranging from 0.25% to 0.5% of the available  portion
of its line of credit.

     The Company has subordinated notes payable to its two stockholders,  with a
legal  right  of  offset  against  the  Company's  note   receivable   from  one
stockholder.  The Company had previously  reported the net amount as a reduction
in  stockholder's  equity when the net balance was a receivable.  The balance of
the receivable  and payable at December 31, 2001 was $2,597,000 and  $4,711,000,
respectively.  The resulting net payable is classified as long-term  debt. It is
the  Company's  intent to satisfy  the  receivable  through  future  stockholder
distributions.

5.   Litigation

     The Company is a party to various lawsuits and claims arising in the normal
course of business.  While the ultimate resolution of lawsuits or claims against
the  Company  cannot be  predicted  with  certainty,  management  is  vigorously
defending all claims and does not expect that these matters will have a material
adverse  effect on the  financial  position  or  results  of  operations  of the
Company.

6.   eSkye Solutions, Inc. Investment

     The Company has been accounting for its investment in eSkye Solutions, Inc.
(eSkye) on the cost method.  On December 28, 2001 eSkye  redeemed a  significant
portion of its outstanding preferred stock at a significant discount.  Since the
company  elected  not to  participate  in this  redemption,  its voting  control
increased to over 20% of voting stock. In accordance with Accounting  Principles
Board  Opinion 18 (APB 18),  the Company is required to apply the equity  method
going forward.  In addition,  in accordance with APB 18, the historical  results
have been retroactively  adjusted as if the Company had been accounting for this
investment  under the  equity  method  for all  periods  presented.  APB 18 also
requires  the  Company  to  evaluate  whether or not an "other  than  temporary"
decline in value of an investment has occurred.  As a result of this evaluation,
the Company has written down the  investment  to a value of $455,000 at December
31, 2001, which the Company believes  approximates the current fair value of the
investment.  After  retroactively  reporting  the  historical  results  for  the
application  of the equity method,  this  impairment  evaluation  resulted in an
additional write-down of $530,000 in the quarter ended December 31, 2001. Losses
from  applying  the equity  method and the  impairment  charges are  included in
"Equity in losses of eSkye" in the Statements of Income.


                                     - 9 -
<PAGE>

7.   Restatement of December 31, 2000 Results

     The Company restated its Consolidated  Financial  Statements for the fiscal
years 2000, 1999, and 1998 due to an overstatement of accounts receivable caused
by a misappropriation  of funds discovered during fiscal 2001. For the Company's
2001 fiscal  year,  a total  charge of $0.8  million was  reflected in operating
results.  Amounts  charged to the fiscal  2000,  1999 and 1998 results were $1.2
million,  $0.5 million and $1.0 million  respectively.  The Company is reporting
the $0.8 million  that was charged to the 2001 fiscal year in the quarter  ended
December  31,  2000.  Since the  investigation  of the  misappropriation  was in
process at December 31, 2000, the Company originally estimated the overstatement
of accounts  receivable at $2.8 million and charged that estimate to the quarter
ended December 31, 2000.  Thus,  the net effect of the  restatement of the three
months  ended  December  31,  2000  results in an increase in net income of $2.0
million.  The  effect  of  this  restatement,  and  the  retroactive  adjustment
described in Note 6, on results of operations  and balance sheets are as follows
(in thousands):

<TABLE>
<CAPTION>
                                        Three Months Ended                 Nine Months Ended
For the period ended:                    December 31, 2000                 December 31, 2000
---------------------                    -----------------                 -----------------
                                     Previously                        Previously
                                      Reported       Restated           Reported       Restated
                                      --------       --------           --------       --------

<S>                                  <C>            <C>                <C>            <C>
Total revenue                        $ 199,732      $ 201,732          $ 518,536      $ 520,536
Gross profit                            41,986         43,986            113,512        115,512
Selling, general and
administrative expenses                 32,668         32,668             95,649         95,649
Income from operations                   9,318         11,318             17,863         19,863
Net income                               6,556          8,383             16,565         17,987

As of:
Accounts receivable                  $  66,392      $  65,704          $  66,392      $  65,704
Total assets                           228,675        227,154            228,675        227,154
Stockholder's equity                    30,471         28,950             30,471         28,950
</TABLE>

                                             - 10 -
<PAGE>

8.   Segment Reporting

     The Company's reportable segments are business units that engage in product
sales and all other activities.  The majority of the all other activities relate
to distribution fee operations.  The Company evaluates performance and allocates
resources based on these segments.

<TABLE>
<CAPTION>
                                                Three Months Ended                                Nine Months Ended
                                                ------------------                                -----------------
                                     December 31, 2001      December 31, 2000          December 31, 2001      December 31, 2000
                                     -----------------      -----------------          -----------------      -----------------
                                                                Restated                                            Restated

<S>                                  <C>                      <C>                        <C>                    <C>
Revenue from external customers
     Product sales                   $ 203,490,000            $ 194,787,000              $ 518,056,000          $ 503,545,000
     All other
                                         5,863,000                6,945,000                 16,818,000             16,991,000
Segment profit (loss)
     Product sales
                                         8,586,000                7,464,000                 12,516,000             18,553,000
     All other
                                           238,000                  919,000                   (820,000)              (566,000)
Segment assets
     Product sales
                                       206,282,000              212,789,000                206,282,000            212,789,000
     All other
                                        11,370,000               14,365,000                 11,370,000             14,365,000
</TABLE>

9.   Subsequent Event

     On January 2, 2002 the Company's USB division  entered into a  distribution
contract with Grolsch  International,  BV as the exclusive importer,  seller and
marketer  of Grolsch  products  within  the  United  States.  The  Company  paid
approximately $1.7 million and recorded an intangible asset to be amortized over
the life of the contract.



                                     - 11 -
<PAGE>

Item 2. Management's Discussion and Analysis


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

     This Form 10-Q, including,  but not limited to the "Management's Discussion
and Analysis of Financial Condition and Results of Operations" section, contains
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation  Reform  Act  of  1995,  which  can  be  identified  by  the  use  of
forward-looking   terminology,   such  as  "may,"  "intend,"  "will,"  "expect,"
"anticipate,"  "should,"  "plans to,"  "estimate"  or "continue" or the negative
thereof or other variations  thereon or comparable  terminology.  In particular,
any statement,  express or implied,  concerning  future operating results or the
ability to generate revenues,  income or cash flow to service the Company's debt
are  forward-looking   statements.   Although  the  Company  believes  that  the
expectations will prove to have been correct. All forward-looking statements are
expressly qualified by such cautionary statements, and the Company undertakes no
obligation to update such forward-looking statements.

     Overview

     The Company is one of the largest  distributors  of wine and spirits in the
United  States.  Substantially  all of the Company's  current  operations are in
Illinois,  Indiana,  Michigan,  and Kentucky.  The Company's  reported  revenues
include net product sales in Indiana,  Illinois and Michigan,  and  distribution
fees in Michigan.  References to U.S. Beverage (USB) relate to the operations of
the Company's  national  import,  craft and specialty  beer  marketing  business
performed by NWS-Illinois.

     The Company was able to increase  total  revenue by 3.8% to $209.4  million
for the three months ended December 31, 2001, while realizing a 2.9% increase in
gross margin compared to the prior year's  comparable  quarter.  The Company was
pleased with its revenue and case volume for the third  quarter  ended  December
31, 2001 considering the uncertain  economic and travel outlook heading into the
quarter.  Case sales of wine and  spirits  were  stable as compared to the prior
year's comparable quarter, reflecting a slight shift by consumers to off-premise
purchases versus the on-premise restaurant and hotel purchases. Other case sales
declined 4.8% compared to the prior year's  comparable  quarter  primarily  from
reduced non-alcoholic sales in the Indiana market, due to reduced representation
of certain bottled water brands.

     Outlook

     The quarter ended December 31, 2001 affirmed the relative  stability of the
alcoholic  beverage  industry.  Management  was  concerned  about the effects of
September  11, 2001,  on sales during the holiday  period,  but sales during the
three  months  ended  December  31,  2001  were even  with the  previous  year's
comparable period in case volume with modestly higher revenue and gross margin.

     The Federal Trade  Commission  ("FTC") has approved the sale of the Seagram
Brands from Vivendi to Diageo and Pernod Ricard. As a condition of FTC approval,
Diageo has  agreed to sell the  Malibu  Rum brand in order to resolve  the FTC's
concern over a potential  duopoly in the rum  category.  This sale of the Malibu
Rum brand is  expected  to occur in the coming  months.  The  Company  currently
represents  the  Malibu  Rum Brand and the other  Seagram  Brands in each of its
markets.



                                     - 12 -
<PAGE>

     Pernod Ricard began managing the Seagram brands it acquired on December 28,
2001, including Seagram's Gin, Martell, Chivas Regal, and others. Until the sale
of the Malibu Rum brand is completed,  Seagram employees will continue to manage
the Seagram brands acquired by Diageo,  including  Captain Morgan,  Crown Royal,
V.O., 7 Crown, Myers's Rum and others.

     In connection  with its  acquisition  of those Seagram  brands,  Diageo has
announced  a  formal  request  for  proposal  ("RFP")  process  for all  Seagram
distributors  in the United States.  NWS has been asked to submit  proposals for
all of our current  markets.  If one or more of the Company's  proposals are not
accepted by Diageo,  Management anticipates acquiring the representation of some
competing brands. There can be no assurance, however, that the failure of Diageo
to accept the proposals of the Company will not have a material  adverse  effect
on the business and financial condition of the Company.

     On January 2, 2002 the  Company's  U.S.  Beverage  division  entered into a
distribution contract with Grolsch International,  BV as the exclusive importer,
seller and marketer of Grolsch products within the United States.

Results of Operations

     The following table includes  information  regarding total cases shipped by
the Company  during the three  months and nine months  ended  December  31, 2001
compared with the comparable periods ended December 31, 2000:

<TABLE>
<CAPTION>
                                             Three Months Ended December 31         Nine Months Ended December 31
                                             ------------------------------         -----------------------------
                                             2001          2000      Percent        2001        2000      Percent
                                             ----          ----      -------        ----        ----      -------
                                            (Cases in thousands)                        (Cases in thousands)

<S>                                          <C>         <C>        <C>              <C>       <C>        <C>
Wine (product sales operations)                973         967       0.6%             2,535     2,432       4.2%
Spirits (product sales operations)           1,091       1,082       0.8%             2,743     2,686       2.1%
Spirits (distribution fee operations)          771         774      (0.4%)            2,124     2,180      (2.6%)
                                             -----       -----                       ------    ------
  Total wine and spirits                     2,835       2,823       0.4%             7,402     7,298       1.4%
Other                                          903         949      (4.8%)            3,598     4,033     (10.8%)
                                             -----       -----                       ------    ------
    Total                                    3,738       3,772      (0.9%)           11,000    11,331      (2.9%)
                                             =====       =====                       ======    ======
</TABLE>


                                                     - 13 -
<PAGE>
Three Months  Ended  December  31,  2001,  Compared  with the Three Months Ended
December 31, 2000.

Revenue

     Total product sales  increased 4.5% to $203.5 million for the quarter ended
December 31, 2001 as compared to $194.8 million for the prior year's  comparable
quarter.  Product sales revenue  increased due to increased  consumer demand for
wine and spirits  products from the off-premise  channel opposed to the weakened
on-premise channel. The on-premise sales,  primarily  represented by restaurants
and hotels, have been adversely affected by the economic downturn and decline in
business  travel  during the three months ended  December 31, 2001.  Case volume
from non-alcoholic products declined from the comparable year's quarterly period
due to the discontinued  representation  of two suppliers in the Indiana market.
The  decline  in these  relatively  low priced  units has not had a  significant
effect on our revenues,  but has continued to allow for lower operating expenses
due to reduced  handling  and delivery  operations.  Fee revenue for the quarter
ended  December  31, 2000  included  the effect of a  retroactive  fee  increase
granted by Michigan,  and  accordingly,  that  quarter  exceeds the current year
quarter by  approximately  $1.1  million.  Case  volume  for the fee  operations
declined  approximately  3,000 cases,  or 0.4% from the prior year's  comparable
quarter.  The state of Michigan has  authorized a fee increase of $.16 per case,
effective  February  3,  2002,  resulting  in a total  per  case fee of $7.48 as
compared to the current $7.32 per case.

Gross Profit

     Gross  margin on product  sales  increased  $2.4  million,  or 6.4% for the
quarter  ended  December  31, 2001 as compared  to the prior  year's  comparable
quarter.  Gross profit  percentage on product  sales  increased to 19.4% for the
quarter  ended  December  31,  2001 as  compared  to 19.0% for the prior  year's
comparable  quarter.  The increase in gross margin  dollars was primarily due to
strong  sales in the  Illinois  market and offset by the  decline in fee revenue
compared to the prior year's comparable quarter.

Operating Expenses

     Total  operating  expenses  increased 2.4% to $33.5 million for the quarter
ended  December  31,  2001 as compared  to $32.7  million  for the prior  year's
comparable  quarter.  Cost savings by the USB division  during the quarter ended
December 31, 2001 were offset by cost increases in other markets.

     Warehouse and delivery expenses decreased slightly to $10.1 million for the
quarter  ended  December  31, 2001 as  compared  to $10.2  million for the prior
year's comparable  quarter.  The operational savings were primarily from reduced
non-alcoholic case volume in the Indiana market and favorable weather conditions
during the quarter ended December 31, 2001.


                                     - 14 -
<PAGE>

     Selling expenses  decreased $0.1 million,  to $12.2 million for the quarter
ended December 31, 2001 as compared to the prior year's comparable quarter. This
decrease  was  primarily  the  result of  reduced  promotional  and  advertising
expenses for the USB division offset by increases in wages and brand spending in
other markets.

     Administrative  expense  increased  $0.9  million,  or 8.9% for the quarter
ended  December 31, 2001 from the prior  year's  comparable  quarter.  Increased
costs of  health  benefits,  casualty  insurance,  and  professional  fees  were
primarily  responsible  for the  expense  increase.  The  Company  is  partially
self-insured for group health costs, and has experienced increases in claims for
the three  months  ended  December  31,  2001 as  compared  to the prior  year's
comparable  quarter.  The Company  renewed its property  and casualty  insurance
during the quarter ended December 31, 2001 and expects to show  increased  costs
for  the  upcoming  policy  period.  Professional  fees  have  increased  due to
additional   accounting  and  legal  costs   associated  with  the  fiscal  2001
restatement and implementation of enhanced internal control procedures.

Income From Operations

     Operating  income  increased  4.3% to $11.8  million for the quarter  ended
December 31, 2001 as compared to $11.3  million for the prior year's  comparable
quarter. The revenue increases and stable margins in the product markets,  along
with isolated  operating expense increases,  were primarily  responsible for the
increase in operating income as compared to the prior year's comparable quarter.

Interest Expense

     Interest  expense  declined $0.5 million,  or 14.7% to $3.0 million for the
quarter  ended  December  31, 2001 as compared  to the prior  year's  comparable
quarter. Reduced revolving credit balances during the quarter ended December 31,
2001,  along  with the  decline  in the  prime  rate upon  which  the  Company's
revolving line of credit is based, were primarily  responsible for the decreased
expense.

Other Income

     Other income decreased $.6 million from the prior year's comparable quarter
primarily  due from the  impairment  charge and  applying  the equity  method to
record  the  Company's  share of losses  from eSkye for the three  months  ended
December 31, 2001. The Company's  interest  income  declined by $0.1 million for
the three  months  ended  December  31,  2001 as  compared  to the prior  year's
comparable  quarter  due to the  reductions  in the prime  rate,  upon which the
shareholder notes in NWSC are based.



                                     - 15 -
<PAGE>

Net Income

     Net income  increased  $0.4 million to $8.8  million for the quarter  ended
December 31, 2001 as compared to $8.4  million for the prior  year's  comparable
quarter.  The increase in net income for the quarter ended December 31, 2001 was
primarily  from the product  markets which had  increased  revenue and operating
income as compared to the prior year's comparable quarterly period.

     For  financial   analysis  purposes  only,  the  Company's  earning  before
interest,  taxes,  depreciation,  and amortization (EBITDA) for the three months
ended  December 31, 2001  increased $0.4 million to $13.8 million as compared to
$13.4 million for the prior year's comparable  reporting  period.  EBITDA should
not be construed  as an  alternative  to operating  income or net cash flow from
operating  activities  and should not be construed as an indication of operating
performance or as a measure of liquidity.

Nine Months  Ended  December  31,  2001,  Compared  with the Nine  Months  Ended
December 31, 2000.

Revenue

     The Company's total revenue for the nine months ended December 31, 2001 was
$534.9  million,  an increase  of 2.8% over the  comparable  prior year  period.
Product sales increased due to the strong sales in the Company's Illinois market
and offset by lower sales in the USB  division.  Case sales for wine and spirits
in the product  markets  increased  3.1% for the nine months ended  December 31,
2001 over the comparable prior year period,  again driven by volume increases in
the  Illinois  market.  Fee revenue was down  slightly,  due to  decreased  case
volume, to $16.8 million for the nine months ended December 31, 2001 compared to
$17.0 million for the comparable prior year period.

Gross Profit

     Gross profit on product sales increased $3.9 million,  or 4.0% for the nine
months ended  December  31, 2001,  over the  comparable  prior year period.  The
Illinois and Indiana markets were primarily  responsible  for the increase,  and
were offset by  decreases  in gross  profit from the USB division as compared to
the comparable prior year period.  Gross profit  percentage on product sales has
increased  slightly  to 19.8% for the nine  months  ended  December  31, 2001 as
compared to 19.6% for the comparable prior year period.

Operating Expenses

     Total  operating  expenses  for the nine  months  ended  December  31, 2001
increased  $2.8  million,  or 2.9% from the  comparable  prior year period.  The
increases were primarily from the Illinois and Michigan markets due to increased
selling expenses and labor costs, respectively.

     Warehouse and delivery expenses increased slightly, by $0.3 million or 1.0%
for the nine  months  ended  December  31, 2001 from the  comparable  prior year
period. Cost efficiencies were created by the lower non-alcoholic  volume in the
Indiana  market  and  offset  by wage  increases  in the other  product  and fee
markets.



                                     - 16 -
<PAGE>

     Selling expenses decreased $0.3 million,  or 0.9% for the nine months ended
December  31,  2001 over the  comparable  prior  year  period.  Promotional  and
advertising  expense reductions by USB during the nine months ended December 31,
2001  were  primarily  responsible  for the  reduced  selling  expense  from the
comparable prior year period.

     Total administrative  expenses increased $2.9 million, or 9.7% for the nine
months ended December 31, 2001 from the comparable prior year period.  Continued
increases  in health & welfare  benefits,  casualty and  workman's  compensation
insurance,  and  professional  fees were primarily  responsible  for the expense
increase  from the  comparable  prior year period.  The Company has  experienced
higher costs for employee's  health care and has implemented cost saving benefit
changes  effective  January 2002.  The Company  renewed it property and casualty
insurance  during  the  quarter  ended  December  31,  2001 and  expects to show
increased  costs  for the  upcoming  policy  period  due to  increased  rates on
facilities and excess liability coverage.  Professional fees have increased from
the  comparable  prior  year  period  due to costs  related  to the  March  2001
restatement and implementation of enhanced internal control procedures.

Income from Operations

     Operating income increased $0.9 million,  or 4.7%, to $20.8 million for the
nine months ended  December  31, 2001 as compared to the prior year period.  The
increase in operating income was primarily from the Illinois and Indiana markets
due to increased revenue,  stable and increased margins and margin  percentages,
along with moderate cost increases as compared to the prior year period.

Interest Expense

     Interest  expense  declined $1.1 million,  or 10.6% to $9.0 million for the
nine months  ended  December  31, 2001 from the  comparable  prior year  period.
Reductions in the prime rate, upon which the Company's  revolving line of credit
is based,  was primarily  responsible for the decreased  expense.  The Company's
prime based rate on its revolving credit facility was 10.0% on December 31, 2000
and was 5.0% on December 31, 2001.

Other Income

    Other income decreased $8.3 million from the comparable prior year period,
primarily due to the $7.5 million gain from the sale of the Cameron Springs
     bottled  water  division  in June  2000,  increased  equity in  losses  and
impairment
in value from the investment in eSkye, and reduced interest income due to the
reductions in the prime rate upon which the shareholder notes in NWSC are based.

     The Company  purchased  $2,125,000 of its senior notes from the open market
on September  28, 2001.  The notes were  purchased for  $2,082,500  plus accrued
interest of $46,617.  Related unamortized issuance costs of $74,391 were written
off due to the purchase of the senior notes.


                                     - 17 -
<PAGE>
     The net loss of $32,000 on the  purchase is  included  in other  income and
expenses. The Company purchased the notes due to the favorable interest rate and
the availability of funds under its revolving credit facility.

Net Income

     Net income was $11.7  million for the nine months ended  December 31, 2001,
as  compared to $18.0  million for the  comparable  prior year  period.  The net
income  variance  from the prior year period was  primarily due to the Company's
gain from the sale of the bottled water division of $7.5 million during the nine
months ended December 31, 2000.

     For  financial   analysis  purposes  only,  the  Company's  earning  before
interest,  taxes,  depreciation,  and amortization  (EBITDA) for the nine months
ending December 31, 2001 was $27.0 million, as compared to the $26.6 million for
the  prior  year  reporting  period.  EBITDA  should  not  be  construed  as  an
alternative to operating  income or net cash flow from operating  activities and
should not be  construed  as an  indication  of  operating  performance  or as a
measure of liquidity.

Liquidity and Capital Resources

     The  Company's  primary  cash  requirements  have  been  to  fund  accounts
receivable and inventories for the product markets in Illinois, Indiana, and its
U. S.  Beverage  operations.  The Company has  historically  satisfied  its cash
requirements principally through cash flow from operations, trade terms and bank
borrowings.

     At December 31, 2001, the Company had $23.0 million  outstanding  and $37.0
million available on its $60.0 million revolving credit facility, as compared to
$24.8 million outstanding at December 31, 2000.

     The Company used $11.6 million in net cash from  operating  activities  for
the nine months ended  December 31, 2001, a net increase of cash of $6.5 million
from the comparable  prior year period.  The net increase in cash  provided,  as
compared  to  the  prior  year's  comparable  period,  primarily  resulted  from
increased cash provided by accounts  receivable of $8.5 million,  reduced use of
cash for  inventories  of $3.6  million,  and  increased use of cash to decrease
accounts payable by $7.0 million.  The Company has realized  increased cash flow
from  reducing  the days in  trade  accounts  receivable  with  improved  credit
management  procedures and management  focus. The timing of inventory  purchases
during the quarter ended December 31, 2001 resulted in increased inventories and
decreased accounts payable as compared to the prior year's comparable period.

     Net cash used by  investing  activities  increased  $6.1  million  from the
comparable prior year period.  This net decrease in funds provided was primarily
the result of reduced purchases of property and equipment during the nine months
ended  December 31, 2001 as compared to the prior year's  comparable  period and
expenditures  during  June  2000  for  investments  in  eSkye  Solutions,  Inc.,
intangibles  and the  receipt  of  funds  from  the  sale of the  bottled  water
division.


                                     - 18 -
<PAGE>

     Net cash  provided by financing  activities  was $14.1 million for the nine
months ended  December 31, 2001 as compared to $15.7 million from the comparable
prior year  period.  Proceeds  from the  revolving  credit  facility  during the
current  nine-month  period were less than the  comparable  prior year period by
$3.8 million.  Payments of long-term debt  increased  primarily from the Company
purchasing  $2,125,000 of its senior notes from the open market on September 28,
2001. The Company's  distributions to stockholders  were reduced by $0.3 million
for the nine months  ended  December  31,  2001 as compared to the prior  year's
comparable  nine-month period, due to the timing of tax liabilities from 2000 to
2001.  Stockholder  distributions  of $8.5  million  for the nine  months  ended
December 31, 2001 were distributed for the following purposes:  $5.7 million for
stockholders'  tax liabilities,  $2.3 million for repayment of stockholder debts
to the Company,  and $0.5 million to a stockholder that has no obligation to the
Company.

     Total  assets  increased  to $217.7  million at December  31, 2001, a $25.4
million increase from March 31, 2001. The increase in assets is primarily due to
greater accounts  receivable and inventories at December 31, 2001 as compared to
March 31,  2001.  The December  quarter is the  Company's  highest  sales volume
period,  while the Company's  March quarter is typically the lowest sales volume
period.  The Company's  total assets were lower at December 31, 2001 as compared
to December 31, 2000 by $9.5 million.  Inventories at December 31, 2001 are $5.8
million  higher than the levels at December 31, 2000 due to increased  inventory
purchases  during the three- month period  ended  December 31, 2001.  Total debt
increased  at  December  31,  2001 as  compared  to  March  31,  2001 due to the
revolving  credit  facility's  balance of $23.0  million at December 31, 2001 as
compared to none at March 31,  2001,  and $24.8  million at December  31,  2000.
Equity increased $3.3 million, to $28.0 million at December 31, 2001 as compared
to  March  31,  2001  primarily  due  to  net  income  of  $11.7  million,   the
reclassification  of the  net  shareholder  payable  to  long-term  debt of $2.1
million,  and the  distributions  to  stockholders  that were not  repaid to the
Company of $6.2 million.

     The  Company  believes  cash  flow from  operations  and  existing  capital
resources, including cash and borrowings available under the Company's revolving
credit facility, will be sufficient to satisfy the Company's anticipated working
capital and debt service requirements and expansion plans.

Inflation

     Inflation has not had a significant impact on the Company's  operations but
there can be no assurance that inflation will not have a negative  effect on the
Company's   financial   condition,   results  of   operations  or  debt  service
capabilities in the future.



                                     - 19 -
<PAGE>

Environmental Matters

     The  Company  currently  owns  and  leases  a  number  of  properties,  and
historically it has owned and/or leased others.  Under applicable  environmental
laws, the Company may be responsible for remediation of environmental conditions
relating to the presence of certain hazardous substances on such properties. The
liability  imposed by such laws is often  joint and several  without  regard for
whether the  property  owner or operator  knew of, or was  responsible  for, the
presence  of such  hazardous  substances.  In  addition,  the  presence  of such
hazardous substances, or the failure to properly remediate such substances,  may
adversely affect the property owner's ability to borrow using the real estate as
collateral and to transfer its interest in the real estate. Although the Company
is not aware of the  presence of  hazardous  substances  requiring  remediation,
there  can be no  assurance  that  releases  unknown  to the  Company  have  not
occurred.  Except for blending and  bottling of a few of the  Company's  private
label  brands,  the  Company  does not  manufacture  any of the  wine or  spirit
products it sells and believes that it has conducted its business in substantial
compliance with applicable environmental laws and regulations.

Other

     As a matter of  policy,  the  Company  plans to  review  and  evaluate  all
professional  services firms every three years.  This review will include but is
not limited to legal, audit and information systems services. The next scheduled
review will occur during fiscal 2005.

New Accounting Pronouncements

     In June 2001, the Financial Accounting Standards Board issued Statements of
Financial  Accounting Standards No. 141, "Business  Combinations",  and No. 142,
"Goodwill and Other  Intangible  Assets",  effective for fiscal years  beginning
after December 15, 2001.  Under the new rules,  goodwill (and intangible  assets
deemed to have indefinite lives) will no longer be amortized but will be subject
to annual  impairment tests in accordance with the Statements.  Other intangible
assets will continue to be amortized over their useful lives.

     The Company is adopting the new rules on accounting  for goodwill and other
intangible  assets  effective  April 1, 2002.  The adoption of this statement is
expected to reduce annual amortization expense  approximately  $100,000.  During
fiscal 2003, the Company will perform the first of the required impairment tests
of goodwill and  indefinite  lived  intangible  assets.  The Company has not yet
determined  what the effect of these tests will be on its earnings and financial
position.

     FASB  Statement  No. 144,  "Accounting  for the  Impairment  or Disposal of
Long-Lived   Assets,"  which  requires  impairment  losses  to  be  recorded  on
long-lived  assets used in operations  when indicators of impairment are present
and the  undiscounted  cash flows  estimated to be generated by those assets are
less  than  the  assets'  carrying  amount.  Statement  144 also  addresses  the
accounting for expected  disposals of long-lived  assets. The Company will adopt
Statement  144 in the  first  quarter  of  fiscal  2003  and,  based on  current
circumstances, does not believe the effect of adoption will be material.


Item 3. Quantitative and Qualitative Disclosures About Market Risk

     There  has  been no  substantial  change  from the  information  previously
provided in the company's Annual Report on Form 10-K.



                                     - 20 -
<PAGE>

PART II.   OTHER INFORMATION


Item 1. Legal Proceedings

     The Company is a party to various lawsuits and claims arising in the normal
course of business.  While the ultimate resolution of lawsuits or claims against
the  Company  cannot be  predicted  with  certainty,  management  is  vigorously
defending all claims and does not expect that these matters will have a material
adverse  effect on the  financial  position  or  results  of  operations  of the
Company.


Item 5. Other Events

     In connection with the "safe harbor"  provisions of the Private  Securities
Litigation Reform Act of 1995,  National Wine & Spirits,  Inc. is identifying in
exhibit 99 to this  quarterly  report  important  factors  that could  cause the
Company's   actual  results  to  differ   materially  from  those  projected  in
forward-looking statements of the Company made by, or on behalf of the Company.


Item 6. Exhibits

     (a) Exhibits

          (99) Exhibit 99 - Forward-Looking Statements

     (b) Reports on Form 8-K

          The Company  filed two Form 8-Ks on December 17, 2001 to dismiss Ernst
          & Young,  LLP as the  Company's  principal  accountant  to  audit  the
          Company's financial  statements,  and to engage Arthur Andersen LLP as
          the principal accountant to audit the Company's financial statements.



                                     - 21 -
<PAGE>

                                    SIGNATURE


     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.




                                         NATIONAL WINE & SPIRITS, INC.


   2/13/02                               /S/ James E. LaCrosse
--------------------                     ---------------------------------------
        Date                             James E. LaCrosse,
                                         Chief Financial Officer





                                     - 22 -
<PAGE>

                                                                      Exhibit 99

Forward-Looking Statements

     From  time  to  time,  the  Company  may  make or  publish  forward-looking
statements  relating  to such  matters  as  anticipated  financial  performance,
business  prospects,  technological  developments,  new  products,  and  similar
matters. Such statements are necessarily estimates reflecting the Company's best
judgment based on current information.  The Private Securities Litigation Reform
Act of  1995  provides  a  safe  harbor  for  forward-looking  statements.  Such
statements  are  usually  identified  by the  use of  words  or  phases  such as
"believes,"  "anticipates,"  "expects,"  "estimates,"  "planned," "outlook," and
"goal." Because forward-looking statements involve risks and uncertainties,  the
Company's  actual results could differ  materially.  In order to comply with the
terms of the safe  harbor,  the  Company  notes that a variety of factors  could
cause the Company's actual results and experiences to differ materially from the
anticipated   results  or  other   expectations   expressed  in  the   Company's
forward-looking statements.

     While  it is  impossible  to  identify  all such  factors,  the  risks  and
uncertainties  that may affect the  operations,  performance  and results of the
Company's business include the following:

(1)  economic  and  competitive  conditions  in the markets in which the Company
     operates;

(2)  strikes  or  other  work  stoppages  affecting  the  Company  or its  major
     customers or suppliers;

(3)  the  Company's  ability  to  continue  to  control  and reduce its costs of
     storage and distribution;

(4)  the level of consumer  demand in the states in which the  Company  operates
     for the Company's line of alcohol-based beverages;

(5)  supplier  consolidation  could result in brand  realignment and the loss of
     certain products and customers;

(6)  the  risks  associated  with  the  reliance  on  one  or a few  significant
     suppliers;

(7)  the impact of significant  price  increases or decreases in availability of
     certain alcohol-based beverages distributed by the Company;

(8)  the  nature  and  extent  of  any  current  or  future  state  and  federal
     regulations regarding the distribution of alcohol-based beverages;

(9)  changes in financial  markets affecting the Company's  financial  structure
     and the Company's costs of capital and borrowed money;

(10) any  other  factors  which  may be  identified  from  time  to  time in the
     Company's periodic SEC filings and other public announcements.

Should  one or more of  these  risks or  uncertainties  materialize,  or  should
underlying assumptions prove incorrect,  actual results may vary materially from
those described in the forward-looking  statements.  The Company does not intend
to update forward-looking statements.


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