King of Avalon almost always has one or two seasonal events being active. At this time the Ale Festival Event is one of them. This guide explains how the event works.
During the duration of the event you receive Pretzels whenever you are harvesting the resource buildings in your city, and Steins of Ale when killing monsters. Both of them can be Used for prizes independently.
You do not have to do anything else as what you normally have to do anyway to get Pretzel items, just harvest your resource buildings.
You get the Steins of Ale by killing monsters and raiding barbarian camps. Typically I get 4 whenever killing a highest level monster.
You get your prizes by selecting the Pretzel or Stein of Ale items in your inventory and clicking Use. Note that they do not need to be synthesized.
The prizes from the Pretzels are not random, you always get 2 1K Food and 2 1K Wood item for each Pretzel.
Prizes for the Steins of Ale are random, prizes I have received include: Gold, 10 Guardian Power, 100 Dragon Spirit EXP, 1K Food, 1K Wood, 50 Silver, 5m Speedup, 2h Firm Defense, Cerussite, Soul Clay, Refining Stone (I).
Note the Food and Wood items from Steins of Ale also seem to be fixed at 2 for each Stein Used.
There is not much to it, just do what you normally do and collect the extra prizes, the same as several seasonal events before. If you have any questions, or comments, let me know in the comment section.