Struggling whiskey brand files for bankruptcy, closes
According to The Street, The alcoholic beverage industry has been grappling with significant financial distress over the past three years, culminating in a series of bankruptcy filings. The economic turmoil has been driven by a combination of factors, including the ongoing effects of the COVID-19 pandemic, rising inflation, increasing interest rates, and a rapidly evolving industry landscape.
U.S. Beer Market Struggles
The U.S. beer market experienced a contraction in 2023, shrinking by 5.1% in volume, according to a 2023 annual report from the Brewers Association. The number of craft brewery closures has surged, with 418 craft breweries shutting down in 2023 alone, up from 97 in 2016. Over the past eight years, approximately 2,036 craft breweries have closed their doors.
Also read: Another popular brewery, beer brand files Chapter 11 bankruptcy
Spirits Industry Reports Flat Sales
Suppliers of whiskey, vodka, gin, and other spirits have also faced difficulties, reporting flat sales in 2023 with only a 0.2% increase in volumes, which rose by just 1.2%. This stagnation reflects broader economic challenges impacting the industry.
Colorado’s Lee Spirits Co. Files for Bankruptcy
In March, Lee Spirits Co., a Colorado-based distiller known for its premium gin, vodka, and liqueurs, filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Colorado. The company ceased all operations on March 4, including its Colorado Springs tasting room, Brooklyn’s on Boulder Street. The distiller cited the prolonged impact of the COVID-19 pandemic and the shifting industry landscape as primary reasons for its financial difficulties.
Montana Distillery Struggles and Files for Bankruptcy
Montana Distillery, which produces a range of vodka, gin, and whiskey, filed for Chapter 11 bankruptcy in April in the U.S. Bankruptcy Court for the District of Montana. The distillery had relocated from Missoula to Stevensville, Montana, in August 2020 in hopes of reducing costs and improving financial stability. Despite these efforts, rising costs, increased property taxes, and decreased revenues due to the pandemic led the company to bankruptcy after four years of struggling in its new location.
Swedish Distillery Mackmyra Files for Bankruptcy
Mackmyra Svensk Whisky, a 25-year-old Swedish whiskey distillery, filed for bankruptcy on August 19 in the Gävle District Court in Sweden. The company has ceased operations and handed control to a bankruptcy trustee. Chairman Peter Ski expressed his sadness over the situation, stating that despite the dedicated efforts of both staff and management, the company could not achieve profitability.
Ski, who became chairman just over a year ago, had hoped to find a long-term solution to Mackmyra’s financial issues. He expressed hope that the bankruptcy trustee would be able to preserve the Mackmyra brand and its 25-year history. Mackmyra had recently reported a 13% decline in revenue for the first quarter of 2024 and had partnered with Microsoft and Finnish tech consultancy Fourkind on an artificial intelligence-generated whiskey blend. Additionally, the company had relaunched in the U.K. on August 15 with Summerton Whisky Club as its distributor.
As the alcoholic beverage industry continues to navigate these turbulent economic conditions, companies are being forced to adapt or face financial collapse, underscoring the broader impact of global economic challenges on specialized sectors.
