Harbor Brewing Company Releases Update

SACKETS HARBOR, N.Y., Oct. 4, 2011 /PRNewswire/ -- Harbor Brewing Company (PINKSHEETS: HBWO) chairman and chief executive officer, Thomas W. Scozzafava, issued the following update to its shareholders today:

Dear Shareholders:

As we enter the final quarter of 2011, management has already begun strategizing on the positioning of its portfolio companies and the focus and direction of the respective businesses for the year 2012.  As you are aware, we own synergistic companies in the brewing, baking and restaurant industries.  As previously announced, sales revenues at the Sackets Harbor Brew Pub restaurant (www.sacketsharborbrewpub.com) are up in 2011 by over 40% from 2009, and expenses have been kept in check creating stronger cash flows and allowing us to significantly reduce debt on the restaurants.  Additionally, we have opened our newest restaurant, Sackets Harbor Anchor, with very positive customer feedback.  While we have not yet seen a full year's results at the Anchor, this owned-but-previously-empty property is now being utilized to positively contribute to the company.  It appears our restaurant assets are now certainly on the right track.

In 2012, management will put forth tremendous effort and capital into both its brewing and its baking holdings.  The US beer market is a market of over $100 billion, and by far the fastest growing segment in this market is craft beer.  Growth of the craft brewing industry in 2010 was 11 percent by volume and 12 percent by retail dollars.  In August of this year, the Brewers Association announced that craft brewed beer dollar sales were up an additional 15 percent in the first half of 2011 and that volume of craft brewed beer sold grew 14 percent for the first six months in 2011.  This is viewed by many as an indication that the craft beer segment is still strong and that craft beer is apparently showing no signs of peaking.  Our resources will be aggressively allocated to attempt to position Harbor Brewing Company to participate in this growth.  This growth may come by increased market penetration of Sackets Harbor Brewing Company's existing brands and through its launch of new products.  We will also seek out partners for contract brewing or for acquisition. The craft beer industry is highly fragmented, with over 1,000 brew pubs, 600 micro breweries, and 80 regional craft breweries.  This may provide Harbor Brewing Company with the opportunity to grow through strategic acquisition.

The commercial bread industry in the US is over $20 billion, with premium artisan bread being one of the industry's fastest growing segments.  Alteri Bakery (www.alteribakery.com) is the areas largest and most well-known artisan bakery.  Alteri Bakery is currently planning the launch of several new products for both the retail and food service channels, and with the addition of certain equipment the company could increase its production capacity by over five times its current levels.  Finally, the Alteri Bakery is in talks with potential distribution partners who have current infrastructure in place that could potentially increase the bakery's Watertown, NY trading range from hundreds of miles to thousand of miles.

About Harbor Brewing Company, Inc.

Harbor Brewing Company, Inc. owns and operates brewing, baking, restaurant and real estate assets.  In the brewing industry the company develops and acquires craft brewing companies and select craft beer labels.  The company's holding, Sackets Harbor Brewing Company, develops, produces, and markets microbrewed beers such as the award winning "War of 1812 Amber Ale," "Thousand Islands Pale Ale" as well as "Railroad Red Ale", "1812 Amber Ale Light" and "Harbor Wheat" specialty beers.  Its "1812 Amber Ale" is the company's flagship brand and was the winner of a Silver Award at the World Beer Championship. Alteri Bakery, which has serviced the northern New York region with quality baked goods since 1971, produces the area's only "true" Italian breads and specialty pastry items, such as cakes, cookies, muffins, bagels, and specialty gift baskets.  Alteri's products can be found at local restaurants, grocery stores, schools, and its own store.  Harbor Brewing also owns the popular dining establishments Sackets Harbor Anchor and Sackets Harbor Brew Pub.

Safe Harbor Statement

This press release contains statements that may constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of the Company, and members of their management as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-statements include fluctuation of operating results, the ability to compete successfully and the ability to complete before-mentioned transactions. The company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.

SOURCE Harbor Brewing Company, Inc.