Supplement to Prospectus dated May 3, 1996
Filed pursuant to
Rule 424(b)(3)
SEC File No.33-95606
MILE HIGH BREWING COMPANY
Public Common Stock Offering
Change in Distributor Network Serving Colorado Beer Market
To better serve customer and shareholder interests, Mile High
Brewing Company has appointed Western Murray Distributing Co. as
its primary distributor in Colorado, effective May 31, 1996. This
new arrangement provides the Company with a single distributor
covering 98% of the state's population. Previously, the Company's
products were distributed in Colorado by a network of nine
independent distributors whose primary products are produced by
Coors Brewing Company. Sales to these nine independent
distributors accounted for 100% of the Company's total sales in
1995 and approximately 41% of its sales for the four-month period
ending April 30, 1996.
The Company believes that the appointment of Western Murray
provides it with several advantages over its past distributor
network and will result in increased beer sales. The appointment
will significantly reduce administrative costs and marketing
inefficiencies previously experienced with maintaining a network
of nine distributors in Colorado. Utilizing one primary
distributor that can readily service the state's predominant
population corridor along the eastern front range of the Rocky
Mountains will permit the Company to more efficiently and
effectively manage its product distribution, production planning,
marketing, promotion and pricing strategies. For example, the
Company's General Manager will spend more time on direct sales
calls and support to key state accounts due to the reduced
administrative time needed to manage one primary distributor.
The Company also believes that Western Murray provides its
brand of Timberline Ales with several competitive advantages over
its previous distribution network and matches the strengths of the
prior arrangement. Western Murray is the second largest
wholesalers of beer, liquor and wine in Colorado in terms of
revenue and sales volume. Furthermore, Western Murray does not
represent the products of any of the three largest U.S. industrial
brewers, minimizing the pressure put on the distributor to sell
the industrial brewer's look-alike craft beers. This will enable
Western Murray to focus on distribution of the craft beers they
represent. Finally, Western Murray has a separate division
focused on selling 3.2% beer which the Company believes will
enhance the service to its newly authorized 3.2% products in all
the state's supermarkets and grocery stores.
While the Company believes that the advantages gained by the
appointment of Western Murray will result in increased beer sales
in Colorado, the relationship is new and untested and no assurance
can be given that Western Murray will market and distribute the
Company's beer as effectively as the Company's previous Colorado
distribution network. The inability of Wester Murray to
effectively market the Company's beer would have a material
adverse effect on the Company's business, financial condition and
results of operations. In addition, the Company may experience a
reduction in beer sales in Colorado during the first few months of
establishing its relationship with Western Murray.
The date of this Supplement is June 3, 1996
