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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED September 26, 2003
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/X/ TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM to
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Commission File Number 0-24708
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AMCON Distributing Company
- ----------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)

Delaware 47-0702918
- ---------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)

7405 Irvington Road, Omaha NE 68122
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(Address of principal executive offices)

Registrant's telephone number, including area code: (402) 331-3727
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Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange
Title of each class on which registered

None None
---- ----

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 Par Value
- ----------------------------------------------------------------------------
(Title of class)

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 of 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrants' knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Annual Report on
Form 10-K or any other amendment to this Form 10-K. /X/

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes No X
----- -----

The aggregate market value of equity securities held by non-affiliates of the
Registrant on March 28, 2003 was approximately $6.8 million.

As of December 12, 2003 there were 3,168,954 shares of common stock
outstanding.

- Documents Incorporated by Reference -
---------------------------------------

Portions of the Company's 2003 Annual Report to Shareholders are incorporated
herein by reference into Parts I, II and IV. Portions of the Company's Proxy
Statement pertaining to the March 11, 2004 Annual Shareholders' Meeting are
incorporated herein by reference into Part III.

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AMCON DISTRIBUTING COMPANY
--------------------------
2003 FORM 10-K ANNUAL REPORT
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Table of Contents
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Page
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PART I

Item 1. Business.................................................... 3

Item 2. Properties.................................................. 11

Item 3. Legal Proceedings.......................................... 12

Item 4. Submission of Matters to a Vote of Security Holders......... 12

Item 4A. Executive Officers of the Company........................... 13

PART II

Item 5. Market for the Registrant's Common Stock and Related
Stockholder Matters......................................... 13

Item 6. Selected Financial Data..................................... 14

Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations......................... 14

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.. 14

Item 8. Financial Statements and Supplementary Data................. 14

Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure......................... 14

Item 9A. Controls and Procedures..................................... 14

PART III

Item 10. Directors and Executive Officers of the Registrant.......... 15

Item 11. Executive Compensation...................................... 15

Item 12. Security Ownership of Certain Beneficial Owners and
Management.................................................. 15

Item 13. Certain Relationships and Related Transactions. ........... 16

Item 14. Principal Accountant Fees and Services...................... 16

PART IV

Item 15. Exhibits, Financial Statement Schedules and
Reports on Form 8-K ........................................ 16

2

PART I

ITEM 1. BUSINESS

GENERAL

AMCON Distributing Company ("AMCON" or the "Company") was incorporated in
Delaware in 1986. The Company's principal executive offices are located at
7405 Irvington Road, Omaha, Nebraska 68122. The telephone number at that
address is 402-331-3727 and the website address is www.amcon.com. The
Company makes available free of charge on its website, its reports on Forms
10-K, 10-Q and 8-K as soon as reasonably practical after filing with the SEC.

AMCON is primarily engaged in the wholesale distribution of consumer products
including cigarettes and tobacco products, candy and other confectionery,
beverages, groceries, paper products and health and beauty care products. In
addition, the Company operates thirteen retail health food stores in Florida
and the Midwest and a non-alcoholic beverage business that includes a natural
spring water bottling and packaging operation in the State of Hawaii and a
marketing and distribution operation which is focused on selling the
Company's Hawaiian natural spring water and other specialty beverages. As
used herein, unless the context indicates otherwise, the term "ADC" means the
wholesale distribution business and "AMCON" or the "Company" means AMCON
Distributing Company and its subsidiaries.

WHOLESALE DISTRIBUTION BUSINESS

ADC serves approximately 7,500 retail outlets in the Great Plains and Rocky
Mountain regions, the largest of which accounted for less than 5.3% of
AMCON's total revenues during fiscal 2003. Convenience Store News, a trade
periodical, ranked ADC as the ninth (9th) largest distributor in its industry
out of approximately 1,000 distributors in the United States based upon
fiscal 2002 sales volume. From its inception, ADC has pursued a strategy of
growth through increased sales and acquisitions. Since 1993, ADC has focused
on increasing operating efficiency in its distribution business by merging
smaller branch distribution facilities into larger ones. In addition, ADC
has grown through expansion of its market area into contiguous regions and by
introduction of new product lines to customers.

ADC distributes approximately 13,000 different consumer products, including
cigarettes and tobacco products, candy and other confectionery, beverages,
groceries, paper products, health and beauty care products, frozen and
chilled products and institutional food service products. While cigarettes
accounted for approximately 73% of the Company's sales volume during fiscal
2003, ADC continues to diversify its businesses and product lines in an
attempt to lessen its dependence upon cigarette sales. ADC's principal
suppliers include Philip Morris USA, RJ Reynolds Tobacco, Brown & Williamson,
Proctor & Gamble, Hershey, Mars, William Wrigley and Nabisco. ADC also
markets private label lines of cigarettes, tobacco, snuff, water, candy
products, batteries and film.





3



ADC has sought to increase sales to convenience stores and petroleum
marketers by adopting a number of operating strategies which it believes
gives it a competitive advantage with these types of retailers. One key
operating strategy is a commitment to customer service. In a continuing
effort to provide better service than its competitors, ADC offers a complete
point-of-sale (POS) program to assist with customer image building and
product promotions, health and beauty programs, profit building private label
programs and custom food service programs, all of which have proven to be
advantageous to convenience store customers. ADC has a policy of next-day
delivery and employs a concept of selling products in cut-case quantities or
"by the each" (i.e. individual units). ADC also offers planograms to
convenience store customers to assist in the design of their store and
display of products within the store. In addition, customers are able to use
ADC's web site to manage their inventory and retail prices, as well as obtain
periodic velocity management reports.

ADC has worked to improve its operating efficiency by investing in the latest
in systems technology, including computerization of buying and financial
control functions. Inventory management has become even more critical due to
the significant price of cigarettes. ADC has also sought to reduce inventory
expenses by improving the number of times its inventory is renewed during a
period ("inventory turns") for the same level of sales. Inventory turned
27.5 times in fiscal year 2003. Inventory turns for the past five years are
as follows:

Fiscal Times
Year Inventory Turned
------ ----------------
2003 27.5
2002 28.5
2001 26.8
2000 25.4
1999 24.5

By keeping its operating costs down, ADC is better able to price its products
in such a manner to achieve an advantage over less efficient distributors in
its market areas.

ADC's main office is in Omaha, Nebraska. ADC has six distribution centers
located in Illinois, Missouri, Nebraska, North Dakota, South Dakota, and
Wyoming. These distribution centers contain a total of approximately 495,000
square feet of floor space and employ modern equipment for the efficient
distribution of the large and diverse product mix. ADC also operates a fleet
of approximately 230 delivery vehicles, including straight trucks and
over-the-road vehicles with refrigerated trailers.

RETAIL HEALTH FOOD BUSINESS

AMCON's retail health food stores, which are operated as Chamberlin's Market
& Cafe ("Chamberlin's" or "CNF") and Akin's Natural Foods Market ("Akin's" or
"ANF"), offer over 35,000 different product selections for their customers.
Chamberlin's, which was first established in 1935, is an award-winning and
highly-acclaimed chain of seven health and natural product retail stores,



4


all offering an extensive selection of natural supplements and herbs, baked
goods, dairy products, delicatessen items and organic produce. Chamberlin's
operates all of its stores in and around Orlando, Florida.

Akin's, also established in 1935, is also an award winning chain of six
health and natural product retail stores, each offering an extensive line of
natural supplements and herbs, dairy products, delicatessen items and organic
produce. In the July 2003 issue of Whole Foods Magazine, a national trade
periodical, Akin's was named "Retailer of the Year" in the retail health food
industry. Akin's has locations in Tulsa (2 stores) and Oklahoma City,
Oklahoma; Lincoln, Nebraska; Springfield, Missouri; and Topeka, Kansas.
Current plans exist to add at least one new store in fiscal 2004.

AMCON's retail health food stores are managed collectively through a main
office in Tulsa, OK, but utilize the name recognition of the established
health food retail chains that were acquired. The Company endeavors to
maintain the local identity of each chain while providing a means to achieve
operating synergies leading to cost savings through centralized management of
operations.

BEVERAGE BUSINESS

AMCON's beverage business consists of Hawaiian Natural Water Company, Inc.
("HNWC") and The Beverage Group, Inc. ("TBG"). HNWC, which was acquired in
December 2001 and is headquartered in Pearl City, HI, was formed in 1994 for
the purpose of bottling, marketing and distributing Hawaiian natural spring
water in Hawaii, the mainland and foreign markets. HNWC's Hawaiian
Springs/R/ brand is the only bottled "natural" spring water available from
Hawaii. All other bottled waters produced in Hawaii contain "purified"
water, from which chemicals and minerals have been removed by means of
reverse osmosis filtration. HNWC draws its Hawaiian Springs water from a
well located at the base of the Mauna Loa mountain in Kea'au (near Hilo) on
the big island of Hawaii. The water is "bottled at the source" in
polyethylene terepthalate ("PET") plastic bottles, which are produced from
pre-forms at HNWC's bottling facility. All of HNWC's retail PET products are
bottled at its facility in Kea'au, HI. These products consist of the
Hawaiian Springs natural spring water line, the Ali'i purified water line and
various limited production co-packaged labeled products.

AMCON formed TBG in January 2003 as a wholly-owned subsidiary for the purpose
of marketing and distributing HNWC's bottled natural spring water products
and other premium specialty beverages. TBG owns the Bahia/R/ tradename and
has exclusive marketing and distribution rights in the United States, Canada
and Mexico for its beverage portfolio which includes Hype Energy Drink/TM/,
Royal Kona Coffee/R/, Bottle Green/R/ and Xterra/R/. Xterra also includes a
line of energy bars. TBG has brokerage agreements with several national
brokerage firms to expand distribution in the convenience store and health
foods channels and markets directly to the grocery store and club store
markets. TBG's main office is in Pasadena, CA. TBG maintains inventory in
several public warehouses throughout the United States who also operate as
consolidators, which allows customers to purchase less than truckload amounts
of TBG product in an efficient manner.


5




ACQUISITIONS AND DISCONTINUED OPERATIONS

Since 1981, the Company has acquired 24 consumer product distributors in the
Great Plains, Rocky Mountain and Southern regions of the United States.

On June 1, 2001, AMCON completed the acquisition of substantially all of the
distribution business and net assets of Merchant's Wholesale, Inc. located in
Quincy, Illinois (the "Quincy" distribution business). In addition, the
Company purchased a 206,000 square foot building occupied by Merchants and
owned by Merchants' sole stockholder.

On December 17, 2001 the Company completed a merger with HNWC, pursuant to
which HNWC merged with and into, and thereby became, a wholly-owned
subsidiary of AMCON Distributing Company. The merger consideration valued
the entire common equity interest in HNWC at approximately $2.9 million,
which was paid in cash of $0.8 million during fiscal 2001 and in common stock
of the Company valued at $2.1 million. As a result, the Company issued
373,558 shares of its common stock to outside HNWC shareholders, representing
12.0% of the Company's outstanding shares after giving effect to the merger.
HNWC option holders and warrant holders also received comparable options and
warrants of the Company, but with the exercise price and number of shares
covered thereby being adjusted to reflect the exchange ratio.

Effective March 23, 2001, AMCON sold the assets of Food For Health Co. Inc.
for $10.3 million, subject to certain adjustments. That sale is reflected as
discontinued operations in AMCON's consolidated financial statements.
Results from the discontinued operations have been excluded from income from
continuing operations in the accompanying consolidated statements of
operations. The effects of the discontinued operations on net income and per
share data are reflected within the accompanying consolidated statements of
operations.

BUSINESS SEGMENTS

AMCON has three reportable business segments: the wholesale distribution of
consumer products; the retail sale of health and natural food products; and a
beverage division consisting of HNWC and TBG, which was formed in fiscal
2003. As described above, AMCON disposed of its health food distribution
segment during the second quarter of fiscal 2001. The results of the
acquired Quincy distribution business are included in the wholesale
distribution of consumer products segment due to similar economic
characteristics shared by AMCON's existing distribution business and the
Quincy distribution business, as well as similar characteristics with respect
to the nature of products distributed, the type and class of customers for
the distribution products and the methods used to distribute the products.
The results of the retail health food stores are included in the retail
segment due to similar economic characteristics, as well as similar
characteristics with respect to the nature of products sold, the type and
class of customers for the health food products and the methods used to sell
the products. The results of HNWC and TBG comprise the beverage segment due
to their unique economic characteristics and the nature of the products, as
well as the methods used to sell and distribute the products. The segments
are evaluated on revenues, gross margins, operating income and income before
taxes.

6



PRINCIPAL PRODUCTS

CIGARETTES. Sales of cigarettes and the gross margin derived therefrom for
the fiscal years ending 2003, 2002, and 2001 are set forth below (dollars in
millions):

Fiscal Year Ended
----------------------------
2003 2002 2001
------ ------ ------
Sales $564.8 $640.4 $420.1
Sales as a % of Total Sales 73.1% 75.6% 72.7%
Gross Margin $ 22.5 $ 24.4 $ 18.1
Gross Margin as a % of Total
Gross Margin 37.5% 39.5% 39.6%
Gross Margin Percentage 4.0% 3.8% 4.3%

Revenues from the sale of cigarettes during fiscal 2003 decreased by 11.8% as
compared to fiscal 2002, while gross profit from the sale of cigarettes
decreased by 2.8% during the same period (see "MANAGEMENT'S DISCUSSION AND
ANALYSIS-Results of Operations-Fiscal Year Ended 2003 Versus Year Ended 2002"
in the Annual Report to Shareholders for the Fiscal Year Ended September 26,
2003 which is incorporated herein by reference). Sales of cigarettes
represented approximately 73% of the Company's sales volume during fiscal
2003. This represents a 2.5% decrease from the prior year and related
primarily to a decrease in cigarette prices on Philip Morris and Brown &
Williamson brands beginning in the second quarter of 2003. Although the
Philip Morris price reduction program was communicated as a temporary
reduction, Philip Morris has extended the program through January 2004 and
could extend it further. Brown & Williamson has stated that their price
reduction program is permanent. In addition, the Company experienced a 9.0%
reduction in carton volume in fiscal 2003 compared to fiscal 2002.

Since 1983, ADC has sought to position itself to capitalize on consumer
demand for discount or value-priced cigarettes by marketing its own private
label cigarettes as a high-quality, value-priced alternative to premium
cigarettes. Substantial price increases implemented by manufacturers of
premium cigarettes during the late 1980's and early 1990's resulted in a
demand for private label cigarettes, which are sold at lower prices than
premium brands. Significant manufacturers' price decreases in premium brand
cigarettes, aimed at recapturing market share, occurred in 1993 and have
caused a steady decline in the sales of private label cigarettes since that
time. Sales of ADC's private label cigarettes have declined an average of
35% annually since 1993. Philip Morris USA has manufactured ADC's private
label cigarettes since 1988 under an exclusive agreement. The Company
entered into a new private label cigarette manufacturing agreement with
Philip Morris effective October 1, 2002. The new agreement ends on December
31, 2004, and ADC has two one-year renewal options. Terms of the new
agreement are not as favorable to the Company as the prior agreement.





7




CONFECTIONERY. Candy, related confectionery items and snacks constitute the
Company's second largest-selling product line, representing approximately
6.8% of the Company's total sales volume during fiscal 2003. Sales of
confectionery items and the gross margin derived therefrom for the fiscal
years ending 2003, 2002, and 2001 are set forth below (dollars in millions):

Fiscal Year Ended
----------------------------
2003 2002 2001
------ ------ ------
Sales $ 51.4 $ 52.6 $ 39.3
Gross Margin 6.4 6.1 4.0
Gross Margin Percentage 12.5% 11.5% 10.1%

AMCON supplies customers with over 1,900 different types of candy and related
products, including chocolate bars, cookies, chewing gum, nuts and other
snack items. Major brand names include products manufactured by Hershey
(Reese's, Kit Kat, and Hershey), Mars (Snickers, M&M's, and Milky Way),
William Wrigley and Nabisco. The Company also markets its own private label
candy under a manufacturing agreement with Palmer Candy Company.

OTHER TOBACCO PRODUCTS. Sales of other tobacco products (cigars, snuff,
chewing tobacco, etc.) represents AMCON's third largest-selling product line,
representing approximately 6.1% of the Company's total sales volume during
fiscal 2003. Sales of other tobacco products and the gross margin derived
therefrom for the fiscal years ending 2003, 2002 and 2001 are set forth below
(dollars in million):

Fiscal Year Ended
----------------------------
2003 2002 2001
------ ------ ------

Sales $ 48.3 $ 46.7 $ 32.9
Gross Margin 4.0 3.7 2.5
Gross Margin Percentage 8.3% 7.9% 7.7 %

NATURAL FOODS AND RELATED PRODUCTS. Natural foods and related products,
which are primarily sold by the retail segment, constitute the Company's
fourth largest-selling product line, representing approximately 4.1% of the
Company's total sales volume during fiscal 2003. Sales of natural foods and
related products and the gross margin derived therefrom for the fiscal years
ending 2003, 2002 and 2001 are set forth below (dollars in millions):

Fiscal Year Ended
----------------------------
2003 2002 2001
------ ------ ------
Sales $ 33.1 $ 31.6 $ 31.8
Gross Margin 13.2 13.2 11.9
Gross Margin Percentage 39.8% 41.7% 37.3%





8


OTHER PRODUCT LINES. Over the past decade, AMCON's strategy has been to
expand its portfolio of consumer products in order to better serve its
customer base. AMCON's other product lines include bottled water and other
beverages, groceries, paper products, health and beauty care products, frozen
and chilled products and institutional food products. During fiscal 2003,
AMCON's sales of other products decreased $1.3 million or 1.7% due to the
loss of several key customers during the year. During fiscal 2003, the gross
profit margin on these types of products was 18.8% compared to 19.2% for
fiscal 2002.

COMPETITION

The distribution business is highly competitive. There are many similar
distribution companies operating in the same geographical regions as ADC.
ADC is one of the largest distribution companies of its kind operating in its
market area. ADC's principal competitors are national wholesalers such as
McLane Co., Inc. (Temple, TX) and Core-Mark International (San Francisco, CA)
and regional wholesalers such as Eby-Brown LLP (Chicago, IL) and
Farner-Bocken (Carroll, IA), along with a host of smaller grocery and tobacco
wholesalers. Most of these competitors generally offer a wide range of
products at prices comparable to ADC's. ADC seeks to distinguish itself from
its competitors by offering a higher level of technology than its smaller
competitors and higher level of customer service than its larger competitors.

The natural food retail industry is highly fragmented, with more than 9,000
stores operating independently or as part of small chains. The two leading
natural food chains, Whole Foods Market and Wild Oats, continue to expand
their geographic markets by opening stores in new markets. In addition,
conventional supermarkets and mass market outlets also are increasing their
emphasis on the sale of natural products. These strategies have contributed
to the saturation of health food retail stores in some markets. This has
increased competition in the health food sector and has had a restraining
impact on same store sales increases in some markets and a slight reduction
in same store sales in other markets.

The retail bottled water and specialty beverage market is highly competitive,
with numerous participants selling products often perceived as generic by
consumers. The principal bases of competition in the industry are brand
recognition, price, water source for bottled water products, and packaging.
Price competition has become more pronounced as the industry has matured.
The Company seeks to develop recognition for its brands by differentiating
its products from more recognized products in the brand category. The
Hawaiian Springs brand of natural spring water is unique because of its water
source. HNWC is the only producer of natural spring water from Hawaii. Most
other popular brands, such as Aquafina/R/, Dasani/R/, Crystal Geyser/R/, and
Arrowhead/R/ are all bottled on the mainland and sell "purified" municipal
water, not "natural" or "spring" water. HNWC generally prices this product
at or slightly below the price for other premium brands.





9





TBG's line of Xterra sports beverages is a "natural" sports drink alternative
to Gatorade/R/ and Powerade/R/ and the Xterra energy bars were developed as a
better tasting, natural alternative to other power bars on the market. HYPE
Energy Drink is a cranberry based energy drink alternative to Red Bull/R/.
Royal Kona Coffee is a line of "iced" coffee designed to compete against a
similar line offered by Starbucks/R/. Management believes that by offering a
portfolio of high quality specialty beverages, retailers have the ability to
choose products that meet their niche market and offer consumers natural
alternatives to more popular brands.

SEASONALITY

Sales in the wholesale distribution and beverage segments are somewhat
seasonal by nature and tend to be higher in warm weather months, which
generally fall within the Company's third and fourth quarters.

GOVERNMENT REGULATION

Various state government agencies regulate the distribution of cigarettes and
tobacco products in several ways, including the imposition of excise taxes,
licensing and bonding requirements. Complying with these regulations is a
very time-consuming, expensive and labor-intensive undertaking. For example,
each state (as well as certain cities and counties) requires the Company to
collect excise taxes ranging from $1.20 to $9.80 per carton on all cigarettes
sold by it in the state. Such excise taxes must be paid in advance and, in
most states, is evidenced by a stamp which must be affixed to each package of
cigarettes. A number of states increased their excise tax on cigarettes in
fiscal 2002 and 2003, and more are expected to do so in the future.

The Company is also subject to regulation by state and local health
departments, the U.S. Department of Agriculture, the Food and Drug
Administration, U.S. Department of Transportation and the Drug Enforcement
Agency. These agencies generally impose standards for product quality and
sanitation, as well as, for security and distribution policies.

The bottled water industry is regulated both in the United States and abroad.
Various state and Federal regulations, designed to ensure the quality of the
product and the truthfulness of its marketing claims, require HNWC to monitor
each aspect of its production process, including its water source, bottling
operations and packaging and labeling practices. The Environmental
Protection Agency requires a yearly analysis of HNWC's water source by a
certified laboratory with respect to a comprehensive list of contaminants
(including herbicides, pesticides, volatile chemicals and trace metals). In
addition, the Hawaii Department of Health requires weekly microbiological
testing of HNWC's source water.

HNWC's bottling facility has an on-site laboratory, where samples of its
finished product are visually and chemically tested daily. HNWC also
utilizes an independent state certified laboratory to test samples from each
production run. In addition, HNWC's production line is subject to constant
visual inspection. HNWC believes that it meets or exceeds all applicable
regulatory standards concerning the quality of its water.


10




In addition to U.S. regulations, HNWC must meet the requirements of foreign
regulatory agencies in order to export and sell its product into other
countries. These requirements are generally similar to, and in certain
respects more stringent than, U.S. regulations. HNWC believes that it is in
compliance with applicable regulations in all foreign territories where it
currently markets its product.

Failure to meet applicable regulations in the U.S. or foreign markets could
lead to costly recalls or loss of certification to market products. Even in
the absence of governmental action, loss of revenue could result from adverse
market reaction to negative publicity.

ENVIRONMENTAL MATTERS

The Company believes that all of its real property is in compliance with all
regulations regarding the discharge of toxic substances into the environment
and is not aware of any condition at its properties that could have a
material adverse effect on its financial condition or results of operations.
In that regard, the Company has not been notified by any governmental
authority of any potential liability or other claim in connection with any of
its properties.

EMPLOYEES

At fiscal year end 2003, the Company had 1,042 full-time and part-time
employees in the following areas:

Managerial 56
Administrative 90
Delivery 122
Sales & Marketing 447
Warehouse 327
-----
Total Employees 1,042
=====

All of ADC's delivery employees in the Quincy distribution center,
representing 37% of ADC's delivery employees company-wide, are represented by
the International Association of Machinists and Aerospace Workers. Management
believes its relations with its employees are generally good.

ITEM 2. PROPERTIES

The location and approximate square footage of the six distribution centers,
thirteen retail stores, water bottling and packaging plant and sales and
marketing offices operated by AMCON as of fiscal year end 2003 are set forth
below:
Location Square Feet
-------- -----------
Distribution - IL, MO, ND, NE, SD & WY 494,600
Retail - FL, KS, MO, NE & OK 126,600
Beverage - HI & CA 20,000
-------
Total Square Footage 641,200
=======

11


AMCON owns its distribution facilities in Quincy, Illinois and Bismarck,
North Dakota. These facilities are subject to a first mortgage securing
borrowings under the Company's mortgage loan and a second mortgage securing
future payments owed in connection with the Merchants Wholesale acquisition
(see "MANAGEMENT'S DISCUSSION AND ANALYSIS-Liquidity and Capital Resources"
in the Annual Report to Shareholders for the Fiscal Year Ended 2003 which is
incorporated herein by reference).

AMCON leases its remaining distribution facilities, retail stores, water
bottling plant, offices and certain equipment under noncancellable operating
and capital leases. Leases for the four distribution facilities, thirteen
retail stores and water bottling and packaging plant leased by the Company
have base terms expiring from 2004 to 2052. Minimum future lease commitments
for these properties and equipment total approximately $24.8 million as of
fiscal year end 2003.

AMCON also has future lease obligations for a facility and equipment related
to the discontinued operations of its former health food distribution
business. The Company estimated its ultimate liabilities related to these
leases and recorded a charge to earnings during the second quarter of fiscal
2001. The Company negotiated a termination settlement during fiscal 2002 on
its former Arizona facility and entered into a sublease agreement on the
remaining facility in Florida. The sub-tenant of the Florida facility was in
default as of fiscal year end 2003 and the Company began eviction
proceedings. The Company incurred approximately $0.1 million of expenses
associated with the facility during fiscal 2003. Management expects there
will be further expenditures incurred on the Florida facility in fiscal 2004
prior to finding another sub-tenant for the property. These expenditures
will be expensed as incurred. However, management is confident that the
building can be subleased, so no amount related to the lease obligation has
been recorded in the reserve for discontinued operations. Any differences
between these expense estimates and their actual settlement will change the
loss accordingly.

Management believes that its existing facilities are adequate for the
Company's present level of operations; however, larger facilities and
additional cross-dock facilities and retail stores may be required to
accommodate the Company's anticipated growth in certain market areas.

ITEM 3. LEGAL PROCEEDINGS

The Company is subject to claims and litigation in the ordinary course of its
business. However, in the opinion of management, no currently pending legal
proceedings or claims against the Company will, individually or in the
aggregate, have a material adverse effect on the Company's financial
condition or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of security holders during the
fourth quarter of fiscal year 2003.




12



ITEM 4A. EXECUTIVE OFFICERS OF THE COMPANY

The Company's day-to-day affairs are managed by its executive officers, who
are appointed by the Board of Directors for terms of one year. The Company
has entered into employment agreements with Mr. Wright and Ms. Evans each
with a term expiring on December 31, 2004. These executive officers are as
follows:

Name Age Position
---- --- --------
William F. Wright 61 Chairman of the Board, Director
Kathleen M. Evans 56 President, Director
Eric J. Hinkefent 42 President of CNF and HFA
Michael D. James 42 Secretary, Treasurer and
Chief Financial Officer

WILLIAM F. WRIGHT has served as the Chairman and Chief Executive Officer of
AMCON Corporation (the former parent of AMCON) since 1976 and as Chairman of
the Company since 1981. From 1968 to 1984, Mr. Wright practiced corporate
and securities law in Lincoln, Nebraska. Mr. Wright is a graduate of the
University of Nebraska and Duke University School of Law and is a certified
public accountant.

KATHLEEN M. EVANS became President of the Company in February 1991. Prior to
that time she served as Vice President of AMCON Corporation from 1985 to
1991. From 1978 until 1985, Ms. Evans acted in various capacities with AMCON
Corporation and its operating subsidiaries.

ERIC J. HINKEFENT has served as President of both Chamberlin Natural Foods,
Inc. and Health Food Associates, Inc. since October 2001. Prior to that time
he served as President of Health Food Associates, Inc. beginning in 1993. He
has also served on the board of The Healthy Edge, Inc. from 1999 through
2003. Mr. Hinkefent is a graduate of Oklahoma State University.

MICHAEL D. JAMES became Treasurer and Chief Financial Officer of the Company
in June 1994. In November 1997, he assumed the responsibilities of Secretary
of the Company. He is a certified public accountant and is responsible for
all financial and reporting functions within the Company. Prior to joining
AMCON, Mr. James practiced accounting for ten years with the firm of
PricewaterhouseCoopers LLP, serving as the senior tax manager of the Omaha,
Nebraska office from 1992 until 1994. Mr. James is a graduate of Kansas
State University.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS

The information required by this item is incorporated by reference from the
Company's Annual Report to Shareholders for the fiscal year ended September
26, 2003 under the heading "Market for Common Stock."




13



ITEM 6. SELECTED FINANCIAL DATA

The information required by this item is incorporated by reference from the
Company's Annual Report to Shareholders for the fiscal year ended September
26, 2003 under the heading "Selected Financial Data."


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The information required by this item is incorporated by reference from the
Company's Annual Report to Shareholders for the fiscal year ended September
26, 2003 under the heading "Management's Discussion and Analysis."

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information required by this item is incorporated by reference from the
Company's Annual Report to Shareholders for the fiscal year ended September
26, 2003 under the heading "Management's Discussion and Analysis -
Quantitative and Qualitative Disclosures About Market Risk."

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements and accompanying notes, together with the report of
independent accountants, are incorporated by reference from the Company's
Annual Report to Shareholders for the fiscal year ended September 26, 2003
under the heading "Consolidated Financial Statements." Supplemental
financial information is incorporated by reference from the Annual Report to
Shareholders for the fiscal year ended September 26, 2003 under the heading
"Selected Quarterly Financial Data."

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

ITEM 9.A. CONTROLS AND PROCEDURES

The Company's management, including the Company's Principal Executive Officer
and Chief Financial Officer, reviewed and evaluated the effectiveness of the
design and operation of the Company's disclosure controls and procedures.
Based on that review and evaluation, the Principal Executive Officer and
Chief Financial Officer have concluded that the Company's current disclosure
controls and procedures, as designed and implemented, were effective as of
the end of the period covered by this report. There have been no significant
changes in the Company's internal controls or in other factors that could
significantly affect the Company's internal controls subsequent to the date
of their evaluation. There were no significant material weaknesses
identified in the course of such review and evaluation and, therefore, no
corrective measures were taken by the Company.





14



PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The Registrant's Proxy Statement to be used in connection with the 2004
Annual Meeting of Shareholders (the "Proxy Statement") will contain under the
caption "Election of Directors" certain information required by Item 10 of
Form 10-K and such information is incorporated herein by this reference. The
information required by Item 10 of Form 10-K as to executive officers is set
forth in Item 4A of Part I hereof.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and certain persons who own more than ten
percent of the Company's Common Stock, to file with the Securities and
Exchange Commission (the "SEC") reports of their ownership of Company Common
Stock. Officers, directors and greater-than-ten-percent shareowners are
required by SEC regulation to furnish the Company with copies of such Section
16(a) reports they file. Based solely upon review of the copies of such
reports received by the Company and written representations from each such
person who did not file an annual report with the SEC (Form 5) that no other
reports were required, the Company believes that there was compliance for the
fiscal year ended 2003 with all Section 16(a) filing requirements applicable
to the Company officers, directors and greater-than-ten-percent beneficial
owners.

CODE OF ETHICS

The Company has adopted a Code of Ethics that applies to the Chairman,
President, Chief Financial Officer and Controller, as required by Section 406
of the Sarbanes Oxley Act of 2002. A copy of the Code of Ethics is attached
to this Form 10-K as Exhibit 14.1.

ITEM 11. EXECUTIVE COMPENSATION

The Registrant's Proxy Statement will contain under the captions
"Compensation of Directors", "Compensation of Executive Officers" and
"Compensation Committee Interlocks and Insider Participation", the
information required by Item 11 of Form 10-K, and such information is
incorporated herein by this reference. The information set forth under the
captions "Report of Compensation Committee on Executive Compensation" and
"Company Performance" is expressly excluded from such incorporation.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The Registrant's Proxy Statement will contain under the captions "Voting
Securities and Beneficial Ownership Thereof by Principal Stockholders,
Directors and Officers" and "Equity Compensation Plan Information" the
information required by Item 12 of Form 10-K and such information is
incorporated herein by this reference.



15




ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Registrant's Proxy Statement will contain under the caption "Certain
Relationships and Related Transactions" the information required by Item 13
of Form 10-K and such information is incorporated herein by this reference.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The Registrant's Proxy Statement will contain under the caption "Ratification
of Appointment of Independent Auditor" the information required by Item 14 of
Form 10-K and such information is incorporated herein by this reference.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)(1) Financial Statements

The following financial statements of AMCON Distributing Company are
incorporated by reference under Item 8. The Annual Report to Shareholders
for the Fiscal Year Ended September 26, 2003 is attached as Exhibit 13.1.

Reference Page
--------------
Independent Auditors' Report F-1
Consolidated Balance Sheets as of Fiscal Years
Ended 2003 and 2002 F-2
Consolidated Statements of Operations for the
Fiscal Years Ended 2003, 2002 and 2001 F-3
Consolidated Statements of Shareholders' Equity
and Comprehensive Income (Loss) for the Fiscal
Years Ended 2003, 2002 and 2001 F-4
Consolidated Statements of Cash Flows for the
Years Ended September 30, 2003, 2002 and 2001 F-5
Notes to Consolidated Financial Statements F-6

(2) Financial Statement Schedules

Independent Auditors' Report of Deloitte & Touche LLP

Schedule II - Valuation and Qualifying Accounts

(3) Exhibits

2.1 Fifth Amended and Restated Agreement and Plan of Merger dated September
27, 2001 by and between AMCON Distributing Company, AMCON Merger Sub,
Inc. and Hawaiian Natural Water Company Inc. (incorporated by reference
to Exhibit 2.1 of AMCON's Registration Statement on Form S-4
(Registration No. 333-71300) filed on November 13, 2001)

2.2 Assets Purchase and Sale Agreement by and between Food For Health
Company, Inc., AMCON Distributing Company and Tree of Life, Inc. dated
March 8, 2001 (incorporated by reference to Exhibit 2.1 of AMCON's
Current Report on Form 8-K filed on April 10, 2001)

16



2.3 Amendment to Assets Purchase and Sale Agreement by and between Food For
Health Company, Inc., AMCON Distributing Company and Tree of Life, Inc.
effective March 23, 2001 (incorporated by reference to Exhibit 2.2 of
AMCON's Current Report on Form 8-K filed on April 10, 2001)

2.4 Asset Purchase Agreement, dated February 8, 2001, between AMCON
Distributing Company, Merchants Wholesale Inc. and Robert and Marcia
Lansing (incorporated by reference to Exhibit 2.1 of AMCON's Current
Report on Form 8-K filed on June 18, 2001)

2.5 Addendum to Asset Purchase Agreement, dated May 30, 2001, between AMCON
Distributing Company, Merchants Wholesale Inc. and Robert and Marcia
Lansing (incorporated by reference to Exhibit 2.2 of AMCON's Current
Report on Form 8-K filed on June 18, 2001)

2.6 Real Estate Purchase Agreement, dated February 8, 2001, between AMCON
Distributing Company and Robert and Marcia Lansing (incorporated by
reference to Exhibit 2.3 of AMCON's Current Report on Form 8-K filed on
June 18, 2001)

2.7 Addendum to Real Estate Purchase Agreement, dated May 30, 2001, between
AMCON Distributing Company and Robert and Marcia Lansing (incorporated
by reference to Exhibit 2.4 of AMCON's Current Report on Form 8-K filed
on June 18, 2001)

3.1 Restated Certificate of Incorporation of the Company, as amended March
19, 1998 (incorporated by reference to Exhibit 3.1 of AMCON's Quarterly
Report on Form 10-Q filed on May 11, 1998)

3.2 Bylaws of the Company (incorporated by reference to Exhibit 3.2 of
AMCON's Registration Statement on Form S-1 (Registration No. 33-82848)
filed on August 15, 1994)

4.1 Specimen Common Stock Certificate (incorporated by reference to Exhibit
4.1 of AMCON's Registration Statement on Form S-1 (Registration No.
33-82848) filed on August 15, 1994)

10.1 Grant of Exclusive Manufacturing Rights, dated October 1, 1993,
between the Company and Famous Value Brands, a division of Philip
Morris Incorporated, including Private Label Manufacturing Agreement
and Amended and Restated Trademark License Agreement (incorporated by
reference to Exhibit 10.1 of Amendment No. 1 to AMCON's Registration
Statement on Form S-1 (Registration No. 33-82848) filed on November 8,
1994)

10.2 Amendment No. 1 to Grant of Exclusive Manufacturing Rights, dated
October 1, 1998, between the Company and Famous Value Brands, a
division of Philip Morris Incorporated, including Amendment No. 1 To
Private Label Manufacturing Agreement and Amendment No. 1 to Amended
and Restated Trademark License Agreement (incorporated by reference to
Exhibit 10.2 of AMCON's Annual Report on Form 10-K filed on December
24, 1998)



17



10.3 Loan and Security Agreement, dated June 1, 2001, between the Company
and LaSalle National Bank (incorporated by reference to Exhibit 10.3
on Form 10-Q filed on August 13, 2001)

10.4 ISDA Master Agreement, dated as of December 22, 2000 between LaSalle
Bank National Association and Merchants Wholesale Inc., as assumed by
the Company on June 1, 2001 (incorporated by reference to Exhibit 10.4
on Form 10-Q/A filed on October 4, 2001)

10.5 Secured Promissory Note, dated as of May 30, 2001 between the Company
and Gold Bank (incorporate by reference to Exhibit 10.5 on Form 10-Q/A
filed on October 4, 2001)

10.6 8% Convertible Subordinated Note, dated September 15, 1999 by and
between Food For Health Company Inc. and Eric Hinkefent, Mary Ann
O'Dell, Sally Sobol, and Amy Laminsky (incorporated by reference to
Exhibit 10.1 of AMCON's Current Report on Form 8-K filed on September
30, 1999)

10.7 Secured Promissory Note, dated September 15, 1999, by and between Food
For Health Company, Inc. and James C. Hinkefent and Marilyn M.
Hinkefent, as trustees of the James C. Hinkefent Trust dated July 11,
1994, as amended, Eric Hinkefent, Mary Ann O'Dell, Sally Sobol, and
Amy Laminsky (incorporated by reference to Exhibit 10.2 of AMCON's
Current Report on Form 8-K filed on September 30, 1999)

10.8 Pledge Agreement, dated September 15, 1999, by and between Food For
Health Company, Inc. and James C. Hinkefent and Marilyn M. Hinkefent,
as trustees of the James C. Hinkefent Trust dated July 11, 1994, as
amended, Eric Hinkefent, Mary Ann O'Dell, Sally Sobol, and Amy
Laminsky (incorporated by reference to Exhibit 10.3 of AMCON's Current
Report on Form 8-K filed on September 30, 1999)

10.9 First Amended and Restated AMCON Distributing Company 1994 Stock
Option Plan (incorporated by reference to Exhibit 10.17 of AMCON's
Current Report on Form 10-Q filed on August 4, 2000)

10.10 AMCON Distributing Company Profit Sharing Plan (incorporated by
reference to Exhibit 10.8 of Amendment No. 1 to the Company's
Registration Statement on Form S-1 (Registration No. 33-82848) filed
on November 8, 1994)

10.11 Employment Agreement, dated May 22, 1998, between the Company and
William F. Wright (incorporated by reference to Exhibit 10.14 of
AMCON's Quarterly Report on Form 10-Q filed on August 6, 1998)

10.12 Employment Agreement, dated May 22, 1998, between the Company and
Kathleen M. Evans (incorporated by reference to Exhibit 10.15 of
AMCON's Quarterly Report on Form 10-Q filed on August 6, 1998)

10.13 ISDA Master Agreement, dated as of May 12, 2003 between the Company
and LaSalle Bank National Association (incorporated by reference to
Exhibit 10.13 of AMCON's Quarterly Report on Form 10-Q filed on
August 11, 2003)

18



10.14 Swap Transaction Confirmation ($10,000,000) dated as of May 23, 2003
between the Company and LaSalle Bank National Association
(incorporated by reference to Exhibit 10.14 of AMCON's Quarterly
Report on Form 10-Q filed on August 11, 2003)

10.15 Swap Transaction Confirmation ($5,000,000) dated as of May 23, 2003
between the Company and LaSalle Bank National Association
(incorporated by reference to Exhibit 10.15 of AMCON's Quarterly
Report on Form 10-Q filed on August 11, 2003)

11.1 Statement re: computation of per share earnings (incorporated by
reference to footnote 3 to the financial statements which are
incorporated herein by reference to Item 8 of Part II herein)

13.1 Annual Report to Shareholders for the Fiscal Year Ended September 26,
2003

14.1 Code of Ethics for Principal Executive and Financial Officers

21.1 Subsidiaries of the Company

23.1 Consent of Deloitte & Touche LLP

31.1 Certification by William F. Wright, Chairman and Principal Executive
Officer, furnished pursuant to section 302 of the Sarbanes-Oxley Act

31.2 Certification by Michael D. James, Vice President and Chief Financial
Officer, furnished pursuant to section 302 of the Sarbanes-Oxley Act

32.1 Certification by William F. Wright, Chairman and Principal Executive
Officer, furnished pursuant to section 906 of the Sarbanes-Oxley Act

32.2 Certification by Michael D. James, Vice President and Chief Financial
Officer, furnished pursuant to section 906 of the Sarbanes-Oxley Act

(b) Reports on Form 8-K

None
















19




SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Act of
1934, the Registrant, AMCON Distributing Company, a Delaware corporation, has
duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Omaha, State of Nebraska, on the
24th day of December, 2003.


AMCON DISTRIBUTING COMPANY

By: /s/ William F. Wright
-------------------------
William F. Wright, Chairman








































20




Pursuant to the requirements of the Securities Act of 1934, this report has
been signed below by the following persons in the capacities indicated on the
24th day of December, 2003.

Signature Title
--------- -----

/s/ William F. Wright Chairman of the Board, (Principal Executive
- ------------------------ Officer), and Director
William F. Wright


/s/ Kathleen M. Evans President and Director
- ------------------------
Kathleen M. Evans


/s/ Michael D. James Secretary, Treasurer and Chief Financial
- ------------------------ Officer (Principal Financial and
Michael D. James Accounting Officer)


/s/ Raymond F. Bentele Director
- ------------------------
Raymond F. Bentele


/s/ William R. Hoppner Director
- ------------------------
William R. Hoppner


/s/ J. Tony Howard Director
- ------------------------
J. Tony Howard


/s/ John R. Loyack Director
- ------------------------
John R. Loyack


/s/ Stanley Mayer Director
- ------------------------
Stanley Mayer


/s/ Allen D. Petersen Director
- ------------------------
Allen D. Petersen


/s/ Timothy R. Pestotnik Director
- ------------------------
Timothy R. Pestotnik

21



INDEPENDENT AUDITORS' REPORT

To the Shareholders and Board of Directors of AMCON Distributing Company:

We have audited the consolidated financial statements of AMCON Distributing
Company and its subsidiaries (the "Company") as of September 26, 2003 and
September 27, 2002, and for each of the three years in the period ended
September 26, 2003 and have issued our report thereon dated December 24,
2003; such financial statements and report are included in your 2003 Annual
Report to Shareholders and are incorporated herein by reference. Our audits
also included the financial statement schedule of the Company, listed in Item
15. This financial statement schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion based on our audits.
In our opinion, such financial statement schedule, when considered in
relation to the basic financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.



DELOITTE & TOUCHE LLP
Omaha, Nebraska
December 24, 2003



S-1


































AMCON Distributing Company
Financial Statement Schedule



SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
- -----------------------------------------------


Net
Amounts
Balance at Provision (Written Off) Balance at
Description Beginning of Period (Benefit) Recovered End of Period
- ------------------ ---------------------- --------- ------------- -----------------------

Allowance for
doubtful accounts Sep 29, 2000 329,069 427,852 (140,742) Sep 28, 2001 616,179
Sep 28, 2001 616,179 390,063 (364,768) Sep 27, 2002 641,474
Sep 27, 2002 641,474 166,417 27,725 Sep 26, 2003 835,616

Allowance for
inventory
obsolescence Sep 29, 2000 - 222,883 - Sep 28, 2001 222,883
Sep 28, 2001 222,883 20,387 - Sep 27, 2002 243,270
Sep 27, 2002 243,270 71,035 (21,000) Sep 26, 2003 293,305




S-2