MBC Holding Company

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International Guild of Hospitality & Restaurant Managers

MBC Holding Company, through its wholly owned subsidiary, Minnesota Brewing Company, is engaged in the brewing, packaging and selling of beverage products. The Company operates a full-scale brewery in Saint Paul, Minnesota, producing its proprietary Grain Belt, Pig's Eye, Minnesota Brew and Yellow Belly beers, and marketing these beers through an independent distribution network, primarily in Minnesota. The Company produces beers under a number of brand names, including Grain Belt, Grain Belt Premium, Grain Belt Light, Grain Belt Premium Light, GBX Malt Liquor, Pig's Eye Pilsner, Pig's Eye Lean, Pig's Eye Ice, Pig's Eye Red, Pig's Eye Non-alcoholic and Yellow Belly.

Grain Belt

Grain Belt, the Company's leading product, is an established product with a 100-year history, originally brewed in Minneapolis, now brewed by the Company, using similar recipes. Grain Belt Premium has above-average alcohol content and richer taste, while regular Grain Belt has average alcohol content and a lighter taste. During 1999, the Company altered the recipe of Grain Belt Premium Light providing for a leaner taste. The brands are Grain Belt Premium, Grain Belt Golden, Grain Belt Premium Light and GBX Malt Liquor.

Pig's Eye

Pig's Eye Pilsner is a medium-bodied pilsner with average alcohol content created for a taste- and price-conscious consumer. The Company also sells Pig's Eye Lean, Pig's Eye Ice, Pig's Eye Red Amber Ale and Pig's Eye NA.

Yellow Belly

Yellow Belly is an alcoholic alternative beverage. It is a malt beverage with select lemon, Margarita and Long Island Tea flavors that provide a distinctive refreshing taste.

The Company's beverages are sold on an "on sale" basis in restaurants, bars and sports arenas and on an "off sale" basis primarily through liquor stores, convenience stores and supermarkets. The product is marketed and delivered to these retailers by independent beverage distributors. Although the Company generally grants its distributors exclusive rights to sell its proprietary products within a defined territory, most of the Company's distributors carry products of other beer producers. Written agreements with the Company's distributors vary, but are generally perpetual or multi-year agreements and terminable by either party for breach of the contract or upon specified notice periods. If the Company terminates an agreement without cause, however, it must pay the distributor an amount equal to the distributor's net earnings from sales of the Company's products during the most recently completed fiscal year. The Company has written agreements with all of its largest distributors and with all but a few of its smaller distributors. During 1999, the Company's three largest distributors accounted for 18.1% of the Company's total sales.

Distributors place product orders directly with the Company. The process of brewing generally takes three to five weeks, after which the products are packaged for sale in returnable bottles, non-returnable bottles, cans or kegs. Finished products are stored in the Company's warehouse until distributors pick them up.

Although there are several hundred companies engaged in the highly competitive brewing industry in the United States, the industry is highly concentrated, with five companies, Anheuser-Busch Companies, Inc., Miller Brewing Co., Adolph Coors Co., Stroh Brewery Co. and Pabst Brewing Co., accounting for 94.8% of 1999 sales. In Minnesota, however, local brands have traditionally had a higher market share than they do nationally.

Disclaimer:
The data included within the Financial section is solely for information and does not construe a recommendation and/or endorsement by IGHRM or its members to invest funds with any of the companies listed. You are strongly advised to obtain professional advice with qualified individuals or corporations for any investments of funds.

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