
                                                                 Exhibit (1)

                                  PRESS RELEASE

For Immediate Release                               Contact: Dennis Sheehan
Monday, May 7, 2001                                          (212) 385-4441


CAPITAL  BEVERAGE  SIGNS  ASSET  PURCHASE  AGREEMENT  TO ACQUIRE  BROOKLYN-BASED
PROSPECT BEVERAGES, INC.


Capital Beverages Corporation (Nasdaq: CBEV) today announced that it has entered
into an Asset Purchase  Agreement to acquire  certain assets and  liabilities of
Prospect Beverages,  Inc., the Brooklyn based Pabst Distributors of Colt-45 Malt
Liquor.

Pabst Brewing Company, the key supplier to approve this transaction, has already
approved the transfer of the  distribution  rights for the Pabst Brewing Company
brands from Prospect to Capital.  Pursuant to this Agreement,  upon the approval
of certain  manufacturers and brewers,  Prospect's other distribution rights and
territories will be transferred to Capital Beverage Corp.

The transaction is also contingent upon Capital's  obtaining necessary financing
in order to replace Prospect's  current debt position,  which is currently being
arranged.

Prospect  shareholders  will receive 500,000 shares of CBEV common stock as well
as employment contracts containing various financial considerations.

"We are  pleased to  announce  the  signing of the  definitive  Agreement  to go
forward  with the Asset  Purchase"  said  Carmine  Stella,  President of Capital
Beverage. Mr. Stella said the acquisition will probably close within the next 20
days.

"We expect this acquisition to have a positive effect on net earnings by the end
of the year.  This  acquisition  will add  approximately  $20 million dollars in
revenue  to  Capital's   existing  $17  million  dollar  gross   revenue.   This
consolidation will cut Capital's overhead substantially through the synergies of
distribution that will be created," Mr. Stella added.

"We are  grateful  that Pabst has approved  this  consolidation  request,  which
should enhance both the brewers' and wholesalers'  position in this marketplace.
This  consolidation  has  been a long  time  coming  and  has now  balanced  our
competitive position with other major wholesalers in the New York City marketing
area," said Mr. Stella.

Statements in this release that are not statements of historical or current fact
constitute  "forward-looking  statements"  within  the  meaning  of the  Private
Securities  Litigation  Reform  Act of  1995.  Such  forward-looking  statements
involve  known and unknown  risks,  uncertainties  and other  unknown facts that
could cause the actual  results of the company to be materially  different  from
the historical  results or from any future results  expressed or implied by such
forward-looking  statements.  In addition to statements that explicitly describe
such risks and uncertainties,  readers are urged to consider  statements labeled
with the terms "believes,"  "belief,"  "expects,"  "intends,"  "anticipates," or
"plans" to be uncertain  and  forward-looking.  The  forward-looking  statements
contained  herein are also subject  generally  to other risks and  uncertainties
that are described from time to time in the Company's  reports and  registration
statements filed with the Securities and Exchange Commission.


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