The craft brewer Redhook Ale Brewery said yesterday that it had entered into a joint venture with Widmer Brothers Brewing Company to run a marketing, sales and distribution venture called Craft Brands Alliance LLC (Craft Brands).

Redhook and Widmer have established Craft Brands to advertise, market, sell and distribute each company's products in the western United States. Craft Brands will be immediately operational.

Redhook also announced that it has completed the restructuring of its ongoing relationship with Anheuser-Busch Inc. (ABI). Redhook has issued 1,808,243 shares of common stock to ABI in exchange for 1,289,872 shares of Series B Preferred Stock held by ABI.

The Series B Preferred Stock, reflected in Redhook's first quarter 2004 balance sheet at approximately US$16.3m, has been cancelled.

The exchange has increased ABI's ownership of Redhook from 29.8% to approximately 33.8%.

Additionally, Redhook will pay US$2.0m to ABI prior to December 1, 2004. Redhook has also entered into a new distribution agreement with Anheuser-Busch, which will expire on December 31, 2024, subject to the one-time right of Anheuser-Busch to terminate the distribution agreement on December 31, 2014.

The new distribution agreement provides for the distribution of Redhook's products in the Midwest and eastern United States and includes an increase in certain fees Redhook will pay to ABI in connection with sales through the distribution alliance.