Boston Beer Has Soft Quarter

Depletions up 4.0% but sales to distributors down 2%

The Boston Beer Company, Inc. achieved a 4% increase in sales to retailers (depletions) in the second quarter of 2005 over the second quarter of 2004. That was the good news. Sales to distributors were down 2.2% from 359,000 bbls in second quarter 2004 to 351,000 bbls in the same period this year.

An inventory build that occurred at the wholesaler level during the first quarter
of 2005 resulted in the disparity between the 2.2% decline in shipments and the 4% increase in depletions. Wholesaler inventory levels at the end of the second quarter
of 2005 were at normal levels, based on historical measures according to a company press release.

The company said that the depletions growth is primarily due to increases in
Twisted Tea, Brewmaster’s Collection and Samuel Adams Seasonals, which was offset
by some weakness in Samuel Adams Boston Lager and Sam Adams Light.

Net income for the quarter was $5.1 million, down by $0.2 million from the same period last year. Net revenue decreased 0.6% in the second quarter of 2005, and gross profit
declined to 59.9% from 60.5% as compared to the second quarter of 2004.

Jim Koch, chairman and founder of the Company, commented, “We are pleased
by the depletion growth in the second quarter, which resulted in approximately
2% growth for the first six months as compared to the prior year. It is too
early to say whether the depletion growth experienced in the second quarter is
related to our new brand communication that we introduced in March 2005. We
have, however, received numerous favorable comments from our wholesalers on
the brand advertising, and we are encouraged by this positive feedback. We
expect to have a clearer view of any impact the new brand messaging has on the
brands’ success towards this year end.”

Boston Beer Company sales year-to-date are up 1.5% over the first half of 2004