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

FORM 10-Q

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

For The Quarterly Period Ended September 30, 2001

Commission File Number 0-26542
___________________________

REDHOOK ALE BREWERY, INCORPORATED
(Exact name of registrant as specified in its charter)

|                                                                                                                       |  |                                                                
|---------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------
|Washington
        (State or other jurisdiction of
        incorporation or organization)                              |  | 91-1141254
        (I.R.S. Employer
        Identification No.)
|                                                                                                                       |  |                                                                
|3400 Phinney Avenue North
                Seattle, Washington
                (Address of principal executive offices) |  | 98103-8624
                (Zip Code)                          

Registrants telephone number, including area code: (206) 548-8000

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 [   ]

Common stock, par value $.005 per share: 6,987,686 shares outstanding as of September 30, 2001.

Page 1 of 15 sequentially numbered pages



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TABLE OF CONTENTS



|           |                                                                                               |                               |  |  |  |  |  | 
|---------- | --------------------------------------------------------------------------------------------- | ----------------------------- |  |  |  |  |  | 
|PART I.   
|           | ITEM 1. Financial Statements                                                                 
|           |                                                                                               | BALANCE SHEETS               
|           |                                                                                               | STATEMENTS OF OPERATIONS     
|           |                                                                                               | STATEMENTS OF CASH FLOWS     
|           |                                                                                               | NOTES TO FINANCIAL STATEMENTS
|           | ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|           | ITEM 3. Quantitative and Qualitative Disclosures about Market Risk                           
|PART II.  
|           | ITEM 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES



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##### Table of Contents



REDHOOK ALE BREWERY, INCORPORATED

FORM 10-Q

For The Quarterly Period Ended September 30, 2001

TABLE OF CONTENTS

|         |  |                                                                                                                           |  |     
|-------- |  | ------------------------------------------------------------------------------------------------------------------------- |  | ----
|         |  |                                                                                                                           |  | Page
|         |  |                                                                                                                           |  |     
|PART I.  |  | Financial Information                                                                                                     |  |     
|ITEM 1.  |  | Financial Statements                                                                                                      |  |     
|         |  | Balance Sheets
September 30, 2001 and December 31, 2000                                                                   |  | 3   
|         |  | Statements of Operations
Three Months Ended September 30, 2001 and 2000
and Nine Months Ended September 30, 2001 and 2000 |  | 4   
|         |  | Statements of Cash Flows
Nine Months Ended September 30, 2001 and 2000                                                    |  | 5   
|         |  | Notes to Financial Statements                                                                                             |  | 6   
|ITEM 2.  |  | Managements Discussion and Analysis of Financial Condition
and Results of Operations                                     |  | 8   
|ITEM 3.  |  | Quantitative and Qualitative Disclosures about Market Risk                                                                |  | 14  
|PART II. |  | Other Information                                                                                                         |  |     
|ITEM 6.  |  | Exhibits and Reports on Form 8-K                                                                                          |  | 14  

2



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PART I.




ITEM 1. Financial Statements




REDHOOK ALE BREWERY, INCORPORATED

BALANCE SHEETS

|                                                             |                                                                                                                                                 |                           |                                   |                                                                    |            |               |            |              |            |            |            | 
|------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------- | --------------------------------- | ------------------------------------------------------------------ | ---------- | ------------- | ---------- | ------------ | ---------- | ---------- | ---------- | 
|                                                             |                                                                                                                                                 |                           |                                   |                                                                    |            | September 30, |            | December 31,
|                                                             |                                                                                                                                                 |                           |                                   |                                                                    |            | 2001          |            | 2000        
|                                                             |                                                                                                                                                 |                           |                                   |                                                                    |            |               |            |             
|                                                             |                                                                                                                                                 |                           |                                   |                                                                    |            | (Unaudited)   |            |              |            |           
|ASSETS                                                      
|Current Assets:                                              |                                                                                                                                                 |                           |                                   |                                                                    |            |               |            |             
|                                                             | Cash and Cash Equivalents                                                                                                                       |                           | $                                 | 6,557,783                                                          |            |               | $          | 7,487,190    |           
|                                                             | Accounts Receivable                                                                                                                             |                           |                                   | 1,365,625                                                          |            |               |            | 1,075,730    |           
|                                                             | Inventories                                                                                                                                     |                           |                                   | 2,925,302                                                          |            |               |            | 2,726,071    |           
|                                                             | Other                                                                                                                                           |                           |                                   | 127,742                                                            |            |               |            | 296,082      |           
|                                                             |                                                                                                                                                 |                           |                                   |                                                                    |            |               |            |             
|                                                             |                                                                                                                                                 | Total Current Assets      |                                   |                                                                    | 10,976,452 |               |            |              | 11,585,073 |           
|Fixed Assets, Net                                            |                                                                                                                                                 |                           | 71,726,525                        |                                                                    |            |               | 73,670,248 |             
|Other Assets                                                 |                                                                                                                                                 |                           | 156,650                           |                                                                    |            |               | 365,181    |             
|                                                             |                                                                                                                                                 |                           |                                   |                                                                    |            |               |            |             
|                                                             |                                                                                                                                                 |                           | Total Assets                      |                                                                    | $          | 82,859,627    |            |              | $          | 85,620,502 |           
|                                                             |                                                                                                                                                 |                           |                                   |                                                                    |            |               |            |             
|LIABILITIES, PREFERRED STOCK AND COMMON STOCKHOLDERS EQUITY
|Current Liabilities:                                         |                                                                                                                                                 |                           |                                   |                                                                    |            |               |            |             
|                                                             | Accounts Payable                                                                                                                                |                           | $                                 | 2,364,193                                                          |            |               | $          | 2,664,165    |           
|                                                             | Accrued Salaries, Wages and Payroll Taxes                                                                                                       |                           |                                   | 1,525,537                                                          |            |               |            | 1,528,739    |           
|                                                             | Refundable Deposits                                                                                                                             |                           |                                   | 1,952,068                                                          |            |               |            | 1,791,267    |           
|                                                             | Other Accrued Expenses                                                                                                                          |                           |                                   | 560,326                                                            |            |               |            | 333,805      |           
|                                                             | Current Portion of Long-Term Debt                                                                                                               |                           |                                   | 450,000                                                            |            |               |            | 450,000      |           
|                                                             |                                                                                                                                                 |                           |                                   |                                                                    |            |               |            |             
|                                                             |                                                                                                                                                 | Total Current Liabilities |                                   |                                                                    | 6,852,124  |               |            |              | 6,767,976  |           
|                                                             |                                                                                                                                                 |                           |                                   |                                                                    |            |               |            |             
|Long-Term Debt, Net of Current Portion                       |                                                                                                                                                 |                           | 6,637,500                         |                                                                    |            |               | 6,975,000  |             
|                                                             |                                                                                                                                                 |                           |                                   |                                                                    |            |               |            |             
|Deferred Income Taxes                                        |                                                                                                                                                 |                           | 600,508                           |                                                                    |            |               | 1,276,149  |             
|                                                             |                                                                                                                                                 |                           |                                   |                                                                    |            |               |            |             
|Convertible Redeemable Preferred Stock                       |                                                                                                                                                 |                           | 16,132,755                        |                                                                    |            |               | 16,099,455 |             
|                                                             |                                                                                                                                                 |                           |                                   |                                                                    |            |               |            |             
|Common Stockholders Equity:                                 |                                                                                                                                                 |                           |                                   |                                                                    |            |               |            |             
|                                                             | Common Stock, Par Value $0.005 per Share, Authorized, 50,000,000
Shares; Issued and Outstanding, 6,987,686 Shares in 2001 and
7,312,786 in 2000 |                           |                                   | 34,938                                                             |            |               |            | 36,564       |           
|                                                             | Additional Paid-In Capital                                                                                                                      |                           |                                   | 55,856,830                                                         |            |               |            | 56,407,023   |           
|                                                             | Accumulated Deficit                                                                                                                             |                           |                                   | (3,255,028                                                         | )          |               |            | (1,941,665   | )         
|                                                             |                                                                                                                                                 |                           |                                   |                                                                    |            |               |            |             
|                                                             |                                                                                                                                                 |                           | Total Common Stockholders Equity |                                                                    |            | 52,636,740    |            |              |            | 54,501,922 |           
|                                                             |                                                                                                                                                 |                           |                                   |                                                                    |            |               |            |             
|                                                             |                                                                                                                                                 |                           |                                   | Total Liabilities, Preferred Stock and
Common Stockholders Equity |            | $             | 82,859,627 |              |            | $          | 85,620,502 | 
|                                                             |                                                                                                                                                 |                           |                                   |                                                                    |            |               |            |             

See Accompanying Notes

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REDHOOK ALE BREWERY, INCORPORATED

STATEMENTS OF OPERATIONS

(Unaudited)

|                                             |  |                                  |            |                                 |  |      |            |      |  |   |            |   |  |   |            |  
|-------------------------------------------- |  | -------------------------------- | ---------- | ------------------------------- |  | ---- | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                             |  | Three Months Ended September 30, |            | Nine Months Ended September 30,
|                                             |  |                                  |            |                                
|                                             |  | 2001                             |            | 2000                            |  | 2001 |            | 2000
|                                             |  |                                  |            |                                 |  |      |            |     
|Sales                                        |  | $                                | 10,517,717 |                                 |  | $    | 10,312,808 |      |  | $ | 30,172,932 |   |  | $ | 28,876,989 |  
|Less Excise Taxes                            |  |                                  | 885,360    |                                 |  |      | 922,373    |      |  |   | 2,581,521  |   |  |   | 2,671,319  |  
|                                             |  |                                  |            |                                 |  |      |            |      |  |   |            |   |  |   |            |  
|Net Sales                                    |  |                                  | 9,632,357  |                                 |  |      | 9,390,435  |      |  |   | 27,591,411 |   |  |   | 26,205,670 |  
|Cost of Sales                                |  |                                  | 6,952,158  |                                 |  |      | 6,387,531  |      |  |   | 20,183,247 |   |  |   | 18,321,291 |  
|                                             |  |                                  |            |                                 |  |      |            |      |  |   |            |   |  |   |            |  
|Gross Profit                                 |  |                                  | 2,680,199  |                                 |  |      | 3,002,904  |      |  |   | 7,408,164  |   |  |   | 7,884,379  |  
|Selling, General and Administrative Expenses |  |                                  | 3,286,341  |                                 |  |      | 3,160,291  |      |  |   | 9,239,199  |   |  |   | 8,508,951  |  
|                                             |  |                                  |            |                                 |  |      |            |      |  |   |            |   |  |   |            |  
|Operating Income (Loss)                      |  |                                  | (606,142   | )                               |  |      | (157,387   | )    |  |   | (1,831,035 | ) |  |   | (624,572   | )
|Interest Expense                             |  |                                  | 91,427     |                                 |  |      | 153,402    |      |  |   | 328,047    |   |  |   | 441,846    |  
|Other Income  Net                           |  |                                  | 60,603     |                                 |  |      | 1,143,147  |      |  |   | 219,591    |   |  |   | 1,291,444  |  
|                                             |  |                                  |            |                                 |  |      |            |      |  |   |            |   |  |   |            |  
|Income (Loss) before Income Taxes            |  |                                  | (636,966   | )                               |  |      | 832,358    |      |  |   | (1,939,491 | ) |  |   | 225,026    |  
|Income Tax Expense (Benefit)                 |  |                                  | (223,080   | )                               |  |      | 305,897    |      |  |   | (659,428   | ) |  |   | 111,551    |  
|                                             |  |                                  |            |                                 |  |      |            |      |  |   |            |   |  |   |            |  
|Net Income (Loss)                            |  | $                                | (413,886   | )                               |  | $    | 526,461    |      |  | $ | (1,280,063 | ) |  | $ | 113,475    |  
|                                             |  |                                  |            |                                 |  |      |            |      |  |   |            |   |  |   |            |  
|Basic Earnings (Loss) per Share              |  | $                                | (0.06      | )                               |  | $    | 0.07       |      |  | $ | (0.18      | ) |  | $ | 0.01       |  
|                                             |  |                                  |            |                                 |  |      |            |      |  |   |            |   |  |   |            |  
|Diluted Earnings (Loss) per Share            |  | $                                | (0.06      | )                               |  | $    | 0.06       |      |  | $ | (0.18      | ) |  | $ | 0.01       |  
|                                             |  |                                  |            |                                 |  |      |            |      |  |   |            |   |  |   |            |  

See Accompanying Notes

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REDHOOK ALE BREWERY, INCORPORATED

STATEMENTS OF CASH FLOWS

(Unaudited)

|                                                                                         |                     |                                                |            |                                 |           |      |           |           |           |  
|---------------------------------------------------------------------------------------- | ------------------- | ---------------------------------------------- | ---------- | ------------------------------- | --------- | ---- | --------- | --------- | --------- | -
|                                                                                         |                     |                                                |            | Nine Months Ended September 30,
|                                                                                         |                     |                                                |            |                                
|                                                                                         |                     |                                                |            | 2001                            |           | 2000
|                                                                                         |                     |                                                |            |                                 |           |     
|Operating Activities                                                                     |                     |                                                |            |                                 |           |      |           |          
|Net Income (Loss)                                                                        |                     | $                                              | (1,280,063 | )                               |           | $    | 113,475   |          
|Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating Activities: |                     |                                                |            |                                 |           |      |           |          
|                                                                                         |                     | Depreciation and Amortization                  |            |                                 | 2,394,594 |      |           |           | 2,469,595 |  
|                                                                                         |                     | (Gain) Loss on Disposal of Fixed Assets        |            |                                 | 2,109     |      |           |           | (908,483  | )
|                                                                                         |                     | Deferred Income Taxes                          |            |                                 | (675,641  | )    |           |           | 95,209    |  
|                                                                                         |                     | Net Change in Operating Assets and Liabilities |            |                                 | (37,632   | )    |           |           | (147,803  | )
|                                                                                         |                     |                                                |            |                                 |           |      |           |          
|Net Cash Provided by Operating Activities                                                |                     |                                                | 403,367    |                                 |           |      | 1,621,993 |          
|                                                                                         |                     |                                                |            |                                 |           |      |           |          
|Investing Activities                                                                     |                     |                                                |            |                                 |           |      |           |          
|Expenditures for Fixed Assets                                                            |                     |                                                | (401,580   | )                               |           |      | (209,518  | )        
|Other, Net                                                                               |                     |                                                | (41,875    | )                               |           |      | 1,692,538 |          
|                                                                                         |                     |                                                |            |                                 |           |      |           |          
|Net Cash Provided by (Used in) Investing Activities                                      |                     |                                                | (443,455   | )                               |           |      | 1,483,020 |          
|                                                                                         |                     |                                                |            |                                 |           |      |           |          
|Financing Activities                                                                     |                     |                                                |            |                                 |           |      |           |          
|Principal Payments on Debt                                                               |                     |                                                | (337,500   | )                               |           |      | (337,500  | )        
|Repurchase of Common Stock                                                               |                     |                                                | (551,819   | )                               |           |      | (114,625  | )        
|                                                                                         |                     |                                                |            |                                 |           |      |           |          
|Net Cash Used in Financing Activities                                                    |                     |                                                | (889,319   | )                               |           |      | (452,125  | )        
|                                                                                         |                     |                                                |            |                                 |           |      |           |          
|Increase (Decrease) in Cash and Cash Equivalents                                         |                     |                                                | (929,407   | )                               |           |      | 2,652,888 |          
|Cash and Cash Equivalents:                                                               |                     |                                                |            |                                 |           |      |           |          
|                                                                                         | Beginning of Period |                                                |            | 7,487,190                       |           |      |           | 5,462,779 |          
|                                                                                         |                     |                                                |            |                                 |           |      |           |          
|                                                                                         | End of Period       |                                                | $          | 6,557,783                       |           |      | $         | 8,115,667 |          
|                                                                                         |                     |                                                |            |                                 |           |      |           |          

See Accompanying Notes

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REDHOOK ALE BREWERY, INCORPORATED

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

1. Basis of Presentation

The accompanying financial statements and related notes should be read in
conjunction with the financial statements and notes thereto included in the
Companys Annual Report on Form 10-K for the year ended December 31, 2000. The
accompanying financial statements of Redhook Ale Brewery, Incorporated (the
Company) have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, certain information and
footnote disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States
have been condensed or omitted pursuant to such rules and regulations. These
financial statements are unaudited but, in the opinion of management, reflect
all material adjustments necessary to present fairly the financial position,
results of operations and cash flows of the Company for the periods presented.
All such adjustments were of a normal, recurring nature. The results of
operations for such interim periods are not necessarily indicative of the
results of operations for the full year.

2. Earnings (Loss) per Share

The calculation of adjusted weighted-average shares outstanding for
purposes of computing diluted earnings per share includes the dilutive effect
of all outstanding convertible redeemable preferred stock and outstanding stock
options for the periods in which the Company reports net income. The
calculation uses the treasury stock method in determining the resulting
incremental average equivalent shares outstanding when the outstanding
convertible redeemable preferred stock and outstanding stock options have a
dilutive effect.

The following table sets forth the computation of basic and diluted
earnings (loss) per common share:

|                                               |              |                                                   |                                |                                      |           |                    |       |                   |           |           |           |      |           |            |       |   |           |           |           | 
|---------------------------------------------- | ------------ | ------------------------------------------------- | ------------------------------ | ------------------------------------ | --------- | ------------------ | ----- | ----------------- | --------- | --------- | --------- | ---- | --------- | ---------- | ----- | - | --------- | --------- | --------- | 
|                                               |              |                                                   |                                |                                      |           | Three Months Ended |       | Nine Months Ended
|                                               |              |                                                   |                                |                                      |           | September 30,      |       | September 30,    
|                                               |              |                                                   |                                |                                      |           |                    |       |                  
|                                               |              |                                                   |                                |                                      |           | 2001               |       | 2000              |           | 2001      |           | 2000
|                                               |              |                                                   |                                |                                      |           |                    |       |                   |           |           |           |     
|Basic earnings (loss) per share computation:   |              |                                                   |                                |                                      |           |                    |       |                   |           |           |           |      |           |            |       |  
|                                               | Numerator:   |                                                   |                                |                                      |           |                    |       |                   |           |           |           |      |           |            |       |   |          
|                                               |              |                                                   | Net income (loss)              |                                      | $         | (413,886           | )     |                   | $         | 526,461   |           |      | $         | (1,280,063 | )     |   | $         | 113,475   |          
|                                               |              |                                                   |                                |                                      |           |                    |       |                   |           |           |           |      |           |            |       |  
|                                               | Denominator: |                                                   |                                |                                      |           |                    |       |                   |           |           |           |      |           |            |       |   |          
|                                               |              |                                                   | Weighted-average common shares |                                      |           | 7,052,053          |       |                   |           | 7,618,243 |           |      |           | 7,109,285  |       |   |           | 7,663,954 |          
|                                               |              |                                                   |                                |                                      |           |                    |       |                   |           |           |           |      |           |            |       |  
|                                               |              |                                                   |                                | Basic earnings (loss) per share      |           | $                  | (0.06 | )                 |           | $         | 0.07      |      |           | $          | (0.18 | ) |           | $         | 0.01      | 
|                                               |              |                                                   |                                |                                      |           |                    |       |                   |           |           |           |      |           |            |       |  
|Diluted earnings (loss) per share computation: |              |                                                   |                                |                                      |           |                    |       |                   |           |           |           |      |           |            |       |  
|                                               | Numerator:   |                                                   |                                |                                      |           |                    |       |                   |           |           |           |      |           |            |       |   |          
|                                               |              |                                                   | Net income (loss)              |                                      | $         | (413,886           | )     |                   | $         | 526,461   |           |      | $         | (1,280,063 | )     |   | $         | 113,475   |          
|                                               |              |                                                   |                                |                                      |           |                    |       |                   |           |           |           |      |           |            |       |  
|                                               | Denominator: |                                                   |                                |                                      |           |                    |       |                   |           |           |           |      |           |            |       |   |          
|                                               |              |                                                   | Weighted-average common shares |                                      |           | 7,052,053          |       |                   |           | 7,618,243 |           |      |           | 7,109,285  |       |   |           | 7,663,954 |          
|                                               |              |                                                   | Effect of dilutive securities: |                                      |           |                    |       |                   |           |           |           |      |           |            |       |   |           |           |          
|                                               |              |                                                   |                                | Series B convertible preferred stock |           |                    |      |                   |           |           | 1,289,872 |      |           |            |      |   |           |           | 1,289,872 | 
|                                               |              |                                                   |                                | Stock Options, Net                   |           |                    |      |                   |           |           | 2,827     |      |           |            |      |   |           |           | 3,295     | 
|                                               |              |                                                   |                                |                                      |           |                    |       |                   |           |           |           |      |           |            |       |  
|                                               |              | Denominator for diluted earnings (loss)
per share |                                |                                      | 7,052,053 |                    |       |                   | 8,910,942 |           |           |      | 7,109,285 |            |       |   | 8,957,121 |          
|                                               |              |                                                   |                                |                                      |           |                    |       |                   |           |           |           |      |           |            |       |  
|                                               |              |                                                   |                                | Diluted earnings (loss) per share    |           | $                  | (0.06 | )                 |           | $         | 0.06      |      |           | $          | (0.18 | ) |           | $         | 0.01      | 
|                                               |              |                                                   |                                |                                      |           |                    |       |                   |           |           |           |      |           |            |       |  

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REDHOOK ALE BREWERY, INCORPORATED

NOTES TO FINANCIAL STATEMENTS (Continued)
(Unaudited)

3. Inventories

Inventories consist of the following:

|                        |  |               |           |              |  |   |           | 
|----------------------- |  | ------------- | --------- | ------------ |  | - | --------- | 
|                        |  | September 30, |           | December 31,
|                        |  | 2001          |           | 2000        
|                        |  |               |           |             
|Finished goods          |  | $             | 1,271,299 |              |  | $ | 935,229   | 
|Raw materials           |  |               | 825,088   |              |  |   | 1,126,772 | 
|Promotional merchandise |  |               | 577,749   |              |  |   | 444,584   | 
|Packaging materials     |  |               | 251,166   |              |  |   | 219,486   | 
|                        |  |               |           |              |  |   |           | 
|                        |  | $             | 2,925,302 |              |  | $ | 2,726,071 | 
|                        |  |               |           |              |  |   |           | 

Finished goods include beer held in fermentation prior to the filtration
and packaging process.

4. Stock Repurchase Program

In May 2000, the Board of Directors authorized the repurchase of up to
500,000 shares of the Companys outstanding shares of common stock. In January
2001, the Board of Directors authorized the repurchase of an additional 250,000
shares of its outstanding shares of common stock. As of September 30, 2001,
700,100 shares of common stock had been purchased in the open market for
$1,136,000. During the nine-month period ended September 30, 2001, 325,100
shares of common stock had been purchased in the open market for $552,000.

5. Surplus Real Estate Sale

During July 2000, the Company sold a real estate parcel which was
previously used as the Fremont Brewery keg filling, storage and shipping
facility. The parcel was sold for approximately $1.7 million in cash and the
resulting gain of approximately $1.0 million is reflected in Other Income  Net
in the statements of operations for the three months and nine months ended
September 30, 2000.

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ITEM 2.Managements Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with
the Companys Financial Statements and Notes thereto included herein. The
Company believes that period-to-period comparisons of its financial results
should not be relied upon as an accurate indicator of future performance.

Overview

Since its formation, the Company has focused its business activities on
the brewing, marketing and selling of craft beers. For the nine months ended
September 30, 2001, the Company had gross sales of $30,173,000, an increase of
4.5% from the nine months ended September 30, 2000. The Companys sales consist
predominantly of sales of beer to third-party distributors and Anheuser-Busch,
Inc. (A-B) through the Companys long-term distribution alliance with A-B
(the Distribution Alliance). In addition, the Company derives other revenues
primarily from the sale of beer, food, apparel and other retail items in its
brewery pubs. The Company is required to pay federal excise taxes on sales of
its beer in the amount of $7 per barrel on the first 60,000 barrels it sells
annually. The excise tax burden on beer sales increases from $7 to $18 per
barrel on annual sales over 60,000 barrels and thus, if sales volume
fluctuates, federal excise taxes would change as a percentage of sales.

The Companys sales volume (shipments) increased 3.5% to 167,600 barrels
for the nine months ended September 30, 2001, as compared to the same period in
2000. In addition to the level of consumer demand in existing markets, the
Companys sales are also affected by other factors such as competitive
considerations, including the significant number of craft brewers and their
promotional pricing and new product introductions as well as increased
competition from imported beers. Sales in the craft beer industry generally
reflect a degree of seasonality, with the first and fourth quarters
historically being the slowest. The Company has historically operated with
little or no backlog, and its ability to predict sales for future periods is
limited.

Under normal circumstances, the Company operates its brewing facilities up
to five days per week with multiple shifts per day. While the maximum designed
production capacity for each of the Woodinville and Portsmouth breweries is
approximately 250,000 barrels per year, the current production capacity is
approximately 250,000 barrels per year at the Woodinville facility and 100,000
barrels per year at the Portsmouth facility. Production capacity at the
Portsmouth facility can be added in phases until the facility reaches its
maximum designed production capacity of 250,000 barrels per year. Such an
increase would require additional capital expenditures, primarily for
fermentation equipment and production personnel. The decision to add capacity
is affected by the availability of capital, construction constraints and
anticipated sales in new and existing markets.

The Companys capacity utilization has a significant impact on gross
profit. Generally, when facilities are operating at their maximum designed
production capacities, profitability is favorably affected because fixed and
semivariable operating costs, such as depreciation and production salaries, are
spread over a larger sales base. Because current period production levels have
been substantially below the Companys current production capacity, gross
margins have been negatively impacted. This impact is expected to be reduced as
actual production increases.

In addition to capacity utilization, the Company expects other factors to
influence profit margins, including: higher costs associated with the
enhancement of existing and the development of newer distribution territories,
such as increased shipping, marketing and sales personnel costs; fees related
to the distribution agreement with A-B; changes in packaging and other material
costs; and changes in product sales mix.

See   Certain Considerations: Issues and Uncertainties.

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Results of Operations

The following table sets forth, for the periods indicated, certain items
from the Companys Statements of Operations expressed as a percentage of net
sales.

|                                             |  |                    |       |                   |  |      |       |      |  |  |       |    |  |  |       |  
|-------------------------------------------- |  | ------------------ | ----- | ----------------- |  | ---- | ----- | ---- |  |  | ----- | -- |  |  | ----- | -
|                                             |  | Three Months Ended |       | Nine Months Ended
|                                             |  | September 30,      |       | September 30,    
|                                             |  |                    |       |                  
|                                             |  | 2001               |       | 2000              |  | 2001 |       | 2000
|                                             |  |                    |       |                   |  |      |       |     
|Sales                                        |  |                    | 109.2 | %                 |  |      | 109.8 | %    |  |  | 109.4 | %  |  |  | 110.2 | %
|Less Excise Taxes                            |  |                    | 9.2   |                   |  |      | 9.8   |      |  |  | 9.4   |    |  |  | 10.2  |  
|                                             |  |                    |       |                   |  |      |       |      |  |  |       |    |  |  |       |  
|Net Sales                                    |  |                    | 100.0 |                   |  |      | 100.0 |      |  |  | 100.0 |    |  |  | 100.0 |  
|Cost of Sales                                |  |                    | 72.2  |                   |  |      | 68.0  |      |  |  | 73.2  |    |  |  | 69.9  |  
|                                             |  |                    |       |                   |  |      |       |      |  |  |       |    |  |  |       |  
|Gross Profit                                 |  |                    | 27.8  |                   |  |      | 32.0  |      |  |  | 26.8  |    |  |  | 30.1  |  
|Selling, General and Administrative Expenses |  |                    | 34.1  |                   |  |      | 33.7  |      |  |  | 33.5  |    |  |  | 32.5  |  
|                                             |  |                    |       |                   |  |      |       |      |  |  |       |    |  |  |       |  
|Operating Income (Loss)                      |  |                    | (6.3  | )                 |  |      | (1.7  | )    |  |  | (6.7  | )  |  |  | (2.4  | )
|Interest Expense                             |  |                    | 0.9   |                   |  |      | 1.6   |      |  |  | 1.2   |    |  |  | 1.7   |  
|Other Income  Net                           |  |                    | 0.6   |                   |  |      | 12.2  |      |  |  | 0.9   |    |  |  | 4.9   |  
|                                             |  |                    |       |                   |  |      |       |      |  |  |       |    |  |  |       |  
|Income (Loss) Before Income Taxes            |  |                    | (6.6  | )                 |  |      | 8.9   |      |  |  | (7.0  | )  |  |  | 0.8   |  
|Income Tax Expense (Benefit)                 |  |                    | (2.3  | )                 |  |      | 3.3   |      |  |  | (2.4  | )  |  |  | 0.4   |  
|                                             |  |                    |       |                   |  |      |       |      |  |  |       |    |  |  |       |  
|Net Income (Loss)                            |  |                    | (4.3  | )%                |  |      | 5.6   | %    |  |  | (4.6  | )% |  |  | 0.4   | %
|                                             |  |                    |       |                   |  |      |       |      |  |  |       |    |  |  |       |  

Three Months Ended September 30, 2001 Compared to Three Months Ended September 30, 2000

Sales. Total sales increased 2.0% to $10,518,000 for the three months
ended September 30, 2001, compared to $10,313,000 in the comparable 2000
period, resulting from a 1.8% increase in sales volume and a slight increase in
other sales. Total sales volumes for the third quarter of 2001 increased to
57,900 barrels from 56,900 barrels for the same period in 2000. West coast
sales decreased 2.6% as compared to the 2000 third quarter shipments, including
a 1.8% decrease in Washington State shipments, the Companys largest market.
Sales other than wholesale beer sales, primarily retail pub revenues, totaled
$1,388,000 in the three months ended September 30, 2001, compared to $1,306,000
in the comparable 2000 period. At September 30, 2001 and 2000, the Companys
products were distributed in 48 states.

Excise Taxes. Excise taxes decreased to $885,000, or 9.2% of net sales in
the 2001 third quarter, compared to $922,000, or 9.8% of net sales in the
comparable 2000 period. In September 2000, Washington State regulations were
modified to require beer taxes previously paid by Washington State brewers to
now be paid by Washington State distributors, the effect of which was to
decrease sales prices charged distributors and decrease excise taxes.
Accordingly, both sales and excise taxes decreased as a percentage of net sales
for the third quarter of 2001.

Cost of Sales. Cost of sales increased 8.8% to $6,952,000 in the three
months ended September 30, 2001, compared to $6,388,000 in the comparable 2000
period, due to higher sales volume and increased raw material and freight
costs. Cost of sales, as a percentage of net sales, was 72.2% for the 2001
period compared to 68.0% for the 2000 period. The utilization rate, based upon
the breweries combined current production capacity, was 66.2% and 65.0% for
quarters ended September 30, 2001 and 2000, respectively. The utilization rate,
based upon the breweries combined maximum designed capacity, was 46.4% and
45.5% for the quarters ended September 30, 2001 and 2000, respectively.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased to $3,286,000 in the 2001 third quarter,
compared to $3,160,000 in the 2000 third quarter due to the addition of several
new sales positions in key markets during the second half of 2000 and an
increase in expenditures for the co-op advertising and promotion program with
the Companys wholesalers. As a percentage of net sales, these expenses were
34.1% and 33.7% for the quarters ended September 30, 2001 and 2000,
respectively.

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Interest Expense.Interest expense decreased to $91,000 for the third
quarter of 2001, compared to $153,000 for the comparable 2000 period,
reflecting the effect of lower outstanding debt and lower average interest
rates.

Other Income- Net. Other income  net, decreased to $61,000 in the 2001
third quarter, compared to $1,143,000 in the 2000 third quarter. The 2000
period includes a gain of approximately $1.0 million resulting from the sale of
a real estate parcel which was previously used as the Fremont Brewery keg
filling, storage and shipping facility. Interest income decreased due to the
decline in interest income resulting from lower average interest rates.

Income Taxes. The Companys effective income tax rate was a 35.0% benefit
for the third quarter of 2001 compared to a 36.7% expense for the third quarter
of 2000 and 33.5% benefit for the first and second quarters in 2000. The change
in the 2001 third quarter rate was the result of a change in the estimated
annual effective tax rate of 34.0%. The 2001 estimated effective tax rate is
based upon an estimate of the full-year pretax result, relative to other
components of the tax provision calculation, such as the exclusion of a portion
of meals and entertainment expenses from tax return deductions.

Nine Months Ended September 30, 2001 Compared to Nine Months Ended September 30, 2000

Sales. Total sales increased 4.5% to $30,173,000 for the nine months
ended September 30, 2001, compared to $28,877,000 in the comparable 2000
period, resulting from a 3.5% increase in sales volume, slightly higher average
pricing net of promotional discounts, and a slight increase in other sales.
Total sales volumes for the first nine months of 2001 increased to 167,600
barrels from 162,000 barrels for the same period in 2000. West coast sales
decreased 1.4% as compared to the 2000 third quarter shipments, including a
0.2% decrease in Washington State shipments, the Companys largest market.
Sales other than wholesale beer sales, primarily retail pub revenues, totaled
$3,334,000 in the nine months ended September 30, 2001, compared to $3,223,000
in the comparable 2000 period.

Excise Taxes. Excise taxes decreased to $2,582,000, or 9.4% of net sales
in the first nine months of 2001, compared to $2,671,000, or 10.2% of net sales
in the comparable 2000 period. In September 2000, Washington State regulations
were modified to require beer taxes previously paid by Washington State brewers
to now be paid by Washington State distributors, the effect of which was to
decrease sales prices charged distributors and decrease excise taxes.
Accordingly, both sales and excise taxes decreased as a percentage of net sales
for the first nine months of 2001.

Cost of Sales. Cost of sales increased 10.2% to $20,183,000 in the first
nine months of 2001, compared to $18,321,000 in the comparable 2000 period, due
to higher sales volume, increased raw material, freight and utility costs, and
a shift in product mix towards an increasing proportion of package sales,
including 12-packs. Cost of sales, as a percentage of net sales, was 73.2% for
the 2001 period compared to 69.9% for the 2000 period. The utilization rate,
based upon the breweries combined current production capacity, was 63.9% and
61.7% for the nine months ended September 30, 2001 and 2000, respectively. The
utilization rate, based upon the breweries combined maximum designed capacity,
was 44.7% and 43.2% for the nine months ended September 30, 2001 and 2000,
respectively.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased to $9,239,000 in the first nine months of
2001, compared to $8,509,000 in the 2000 period due to the addition of several
new sales positions in key geographic markets during the second half of 2000
and an increase in expenditures for the co-op advertising and promotion program
with the Companys wholesalers. As a percentage of net sales, these expenses
were 33.5% and 32.5% for the nine months ended September 30, 2001 and 2000,
respectively.

Interest Expense.Interest expense decreased to $328,000 for the nine
months ended September 30, 2001, compared to $442,000 for the comparable 2000
period, reflecting the effect of lower outstanding debt and lower average
interest rates.

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Other Income Net. Other income - net, decreased to $220,000 in the nine
months of 2001, compared to $1,291,000 in the 2000 period. The 2000 period
includes a gain of approximately $1.0 million resulting from the sale of a real
estate parcel which was previously used as the Fremont Brewery keg filling,
storage and shipping facility. Interest income decreased due to lower average
interest rates.

Income Taxes. The Companys effective income tax rate was a 34.0% benefit
for the nine months ended September 30, 2001 compared to 49.6% for the 2000
period. The 2001 estimated effective tax rate is based upon an estimate of the
full-year pretax result, relative to other components of the tax provision
calculation, such as the exclusion of a portion of meals and entertainment
expenses from tax return deductions. The 2000 period reflects the effect of
the real estate sale. The effective rate for the full year 2000 was
31.1%.

Liquidity and Capital Resources

The Company had $6,558,000 and $7,487,000 of cash and cash equivalents at
September 30, 2001 and December 31, 2000, respectively. At September 30, 2001,
the Company had working capital of $4,124,000. The Companys long-term debt as
a percentage of total capitalization (long-term debt, convertible redeemable
preferred stock and common stockholders equity) was 9.3% at September 30,
2001, compared to 9.5% at December 31, 2000. Cash provided by operating
activities was $403,000 and $1,622,000 for the nine months ended September 30,
2001 and September 30, 2000, respectively. The decrease in operating cash flow
in the nine months ended September 30, 2001, was due to the timing of the
collection of accounts receivable in December 2000 and payment of certain
current liabilities in January 2001.

On June 5, 1997, the Company converted the $9 million outstanding balance
of its secured bank facility (the Secured Facility) to a five-year term loan
with a 20-year amortization schedule. On June 19, 2001, the term loan was
amended to allow for a second five-year term, maturing on June 5, 2007. As of
September 30, 2001, there was $7.1 million outstanding on the Secured Facility,
and the Companys one-month LIBOR-based borrowing rate was approximately 3.94%.
In addition, the Company has a $10 million revolving credit facility (the
Revolving Facility) with the same bank through July 1, 2002, and as of
September 30, 2001, there were no borrowings outstanding on this facility. The
Secured Facility and the Revolving Facility are secured by substantially all of
the Companys assets. Through June 5, 2002, interest in the Secured Facility
will accrue at a variable rate based on the London Inter Bank Offered Rate
(LIBOR), plus 1.25% to 2.00%, depending on the Companys debt-to-tangible net
worth ratio. Effective June 5, 2002, interest on the Secured Facility will
accrue at LIBOR plus 1.75% to 2.25%, depending on the debt-to-tangible net
worth ratio. The interest rate for the Revolving Facility is the applicable
LIBOR plus 1.00% to 2.00%, depending on the Companys debt service-to-cash flow
ratio. The Company has the option to fix the applicable interest rate for up to
twelve months by selecting LIBOR for one- to twelve-month periods as a base.

The Company has required capital principally for the construction and
development of its technologically-advanced production facilities. To date, the
Company has financed its capital requirements through cash flow from
operations, bank borrowings and the sale of common and preferred stock. The
Company expects to meet its future financing needs, including the advertising
expenditures associated with the brand investment advertising and promotion
program, and working capital and capital expenditure requirements, through cash
on hand, operating cash flow and, to the extent required and available, bank
borrowings and offerings of debt or equity securities. Capital expenditures for
the first nine months of 2001 totaled $402,000. Capital expenditures for 2001
are expected to total approximately $500,000.

In May 2000, the Board of Directors authorized the repurchase of up to
500,000 shares of the Companys outstanding shares of common stock. In January
2001, the Board of Directors authorized the repurchase of an additional 250,000
shares of its outstanding shares of common stock. As of September 30, 2001,
700,100 shares of common stock had been purchased in the open market for
$1,136,000. During the nine-month period ended September 30, 2001, 325,100
shares of common stock had been purchased in the open market for $552,000.
During October 2001, an additional 5,000 shares were purchased in the open
market for $8,500.

The Company has certain commitments, contingencies and uncertainties
relating to its normal operations. Management believes that any such
commitments, contingencies or uncertainties, including any environmental

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uncertainties, will not have a material adverse effect on the Companys
financial position or results of operations.

Certain Considerations: Issues and Uncertainties

The Company does not provide forecasts of future financial performance or
sales volumes, although this Quarterly Report contains certain other types of
forward-looking statements that involve risks and uncertainties. The Company
may, in discussions of its future plans, objectives and expected performance in
periodic reports
filed by the Company with the Securities and Exchange Commission (or
documents incorporated by reference therein) and in written and oral
presentations made by the Company, include forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, or
Section 21E of the Securities Exchange Act of 1934, as amended. Such
forward-looking statements are based on assumptions that the Company believes
are reasonable, but are by their nature inherently uncertain. In all cases,
there can be no assurance that such assumptions will prove correct or that
projected events will occur. Actual results could differ materially from those
projected depending on a variety of factors, including, but not limited to, the
issues discussed below, the successful execution of market development and
other plans and the availability of financing. While Company management is
optimistic about the Companys long-term prospects, the following issues and
uncertainties, among others, should be considered in evaluating its business
prospects and any forward-looking statements.

Effect of Competition on Future Sales.The domestic market in which the
Companys craft beers are sold is highly competitive due to the proliferation
of small craft brewers, including contract brewers, the increase in the number
of products offered by such brewers, increased competition from imported beers
and the introduction of fuller-flavored products by major national brewers. The
Companys revenue growth rate began to slow in late 1996, and declines in sales
volume ranged from 2.3% to 5.7% during the years 1997 through 1999, due to the
highly competitive draft beer market. Sales volumes for the year ended December
31, 2000 increased 7.6% as compared to the corresponding prior year, and sales
volumes for all quarters from September 30, 1999 through September 30, 2001
increased from 1.8% to 14.2% as compared to corresponding prior year quarters.
However, if the Company were to experience negative sales trends, the Companys
future sales and results of operations would be adversely affected. The Company
has historically operated with little or no backlog and, therefore, its ability
to predict sales for future periods is limited.

Sales Prices.Future prices the Company charges for its products may
decrease from historical levels, depending on competitive factors in the
Companys various markets. The Company has participated in price promotions
with its wholesalers and their retail customers in most of its markets. The
number of markets in which the Company participates in price promotions and the
frequency of such promotions may increase in the future.

Variability of Gross Margin and Cost of Sales.The Company anticipates
that its future gross margins will fluctuate and may decline as a result of
many factors, including disproportionate depreciation and other fixed and
semivariable operating costs, depending on the level of production at the
Companys breweries in relation to current and maximum designed production
capacity. The Companys high level of fixed and semivariable operating costs
causes gross margin to be very sensitive to relatively small increases or
decreases in sales volume. In addition, other factors that could affect cost of
sales include changes in freight charges, the availability and prices of raw
materials and packaging materials, the mix between draft and bottled product
sales, the sales mix of various bottled product packages, and Federal or state
excise taxes. Also, as sales volumes through the Distribution Alliance
increase, the alliance fee, and other staging and administrative costs, would
increase.

Advertising and Promotional Costs.Prior to June 1999 the Company had
done very limited advertising. Based upon market and competitive
considerations, the Company determined that a significant increase in such
spending was appropriate. Accordingly, in June 1999 the Company began a brand
investment program that significantly increased advertising and related costs.
The increased advertising investment, which includes a co-op program with the
Companys wholesalers, continued through 1999, 2000 and the first nine months
of 2001 and is expected to continue for the foreseeable future with the
objective of establishing or maintaining momentum towards capturing a larger
share of the fragmented craft beer market. This increased spending

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significantly increased the Companys selling, general and administrative
expenses in 1999, 2000 and the first nine months of 2001, leading to increased
losses and a reduction in stockholders equity. In addition, market and
competitive considerations could require an increase in other promotional costs
associated with developing existing and new markets.

Relationship with Anheuser-Busch, Incorporated.Most of the Companys
future sales are expected to be through the Distribution Alliance with A-B. If
the Distribution Alliance were to be terminated, or if the relationship between
A-B and the Company were to deteriorate, the Companys sales and results of
operations could be materially adversely affected. In the event that the A-B
Distribution Agreement is terminated on or before December 31, 2004, under
circumstances described in the Companys Annual Report on Form 10-K for
the year ended December 31, 2000 (see Item 1. Business- Relationship with
Anheuser-Busch, Incorporated  A-B Distribution Agreement), the terms of the
Series B Preferred Stock purchased by A-B pursuant to the A-B Investment
Agreement require the mandatory redemption of the Series B Preferred Stock on
December 31, 2004, at a redemption price equal to $12.61 per share
(approximately $16.3 million in the aggregate), plus an amount equal to
accumulated and unpaid dividends thereon, from legally available funds. Such a
mandatory redemption could have a material adverse effect on the financial
position and cash flows of the Company. While the Company believes that the
benefits of the Distribution Alliance, in particular distribution and material
cost efficiencies, offset costs associated with the Alliance, there can be no
assurance that these costs will not have a negative impact on the Companys
profit margins in the future.

Dependence on Third-Party Distributors.The Company relies heavily on
third-party distributors for the sale of its products to retailers. The
Companys most significant non-Distribution Alliance wholesaler, K&L
Distributors, Inc., an A-B affiliated wholesaler in the Seattle area, accounted
for approximately 14% of the Companys sales in the first nine months of 2001.
Substantially all of the remaining sales were made through the Distribution
Alliance to A-B affiliated distributors, most of whom are independent
wholesalers. A disruption of the wholesalers or A-Bs ability to distribute
products efficiently due to any significant operational problems, such as
wide-spread labor union strikes, or the loss of K&L Distributors as a customer,
or the termination of the Distribution Alliance could have a material adverse
impact on the Companys sales and results of operations.

Customer Acceptance, Consumer Trends and Public Attitudes.If consumers
were unwilling to accept the Companys products or if general consumer trends
caused a decrease in the demand for beer, including craft beer, it could
adversely impact the Companys sales and results of operations. The alcoholic
beverage industry has become the subject of considerable societal and political
attention in recent years due to increasing public concern over alcohol-related
social problems, including drunk driving, underage drinking and health
consequences from the misuse of alcohol. If beer consumption in general were to
come into disfavor among domestic consumers, or if the domestic beer industry
were subjected to significant additional governmental regulation, the Companys
sales and results of operations could be adversely affected.

Effect of Sales Trends on Brewery Efficiency and Operations.Even though
sales volumes for 2000 increased 7.6% as compared to 1999, and sales volumes
for all quarters from September 30, 1999 through September 30, 2001 increased
from 1.8% to 14.2% as compared to corresponding prior year quarters, the
Companys sales volumes declined modestly in 1997, 1998 and the first half of
1999. Those declines coincided with significantly slower sales growth in the
highly competitive craft beer segment. The Companys breweries have been
operating at production levels substantially below their actual and maximum
designed capacities. Operating breweries at low capacity utilization rates
negatively impacts gross margins and operating cash flows generated by the
production facilities. In 1998, the Company permanently curtailed production at
its Fremont Brewery and wrote the related assets down to their estimated net
realizable value. The Company will continue to evaluate whether it expects to
recover the costs of its two remaining production facilities over the course of
their useful lives.

Income Tax Benefits.As of December 31, 2000, the Company had federal
income tax net operating loss carryforwards (NOLs) of approximately $23.5
million, substantially all of which expire from 2012 through 2020. NOLs can
generally be utilized to offset regular tax liabilities in future years, and
carried back no more than 2 years and forward no more than 20 years. Should the
Company incur significant operating losses in the future, thus generating
additional NOLs, the Company may be required to establish a valuation
allowance if it

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is more likely than not that all, or a portion, of an NOL would
either expire before the Company is able to realize its benefit, or that future
utilization is uncertain. Such a valuation allowance would reduce the income
tax benefit recorded in the statement of operations.

Recent Accounting Pronouncements

In June 2001, the FASB issued SFAS 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. Adoption of FAS 141/142 did not have an
impact on the Companys financial condition or results of operations.




ITEM 3.Quantitative and Qualitative Disclosures about Market Risk

The Company has assessed its vulnerability to certain market risks,
including interest rate risk associated with financial instruments included in
cash and cash equivalents and long-term debt. Due to the nature of these
investments and the Companys investment policies, the Company believes that
the risk associated with interest rate fluctuations related to these financial
instruments does not pose a material risk.

The Company did not have any derivative financial instruments as of
September 30, 2001.




PART II.




ITEM 6.Exhibits and Reports on Form 8-K

(a)  Exhibits

The following exhibits are filed as part of this report.

None were filed during the quarter ended September 30, 2001.

(b)  Reports on Form 8-K

None were filed during the quarter ended September 30, 2001.

ITEMS 1, 2, 3, 4 and 5 of PART II are not applicable and have been omitted.

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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.

|                  |                                                                                                 |                       
|----------------- | ----------------------------------------------------------------------------------------------- | ----------------------
|November 13, 2001 | REDHOOK ALE BREWERY, INCORPORATED                                                              
|                 
|                  | BY:                                                                                             | /s/ David J. Mickelson
|                  |                                                                                                
|                  | David J. MickelsonExecutive Vice President,
Chief Financial Officer and Chief Operating Officer

| |                                                                       |                    
| | --------------------------------------------------------------------- | -------------------
| | BY:                                                                   | /s/ Anne M. Mueller
| |                                                                      
| | Anne M. MuellerController and Treasurer,
Principal Accounting Officer

15