Declining alcohol consumption rates have become a major problem for alcoholic beverage producers, with many of them blaming the decreased consumer demand for the financial difficulties they face.

Every type of alcoholic beverage business has been affected by the downturn in consumption, including craft breweries, wineries, and spirits distilleries.

Falling alcohol consumption has led a provider of major distilled spirits brands, MGP Ingredients Inc., to shutter two key facilities and lay off dozens of workers as it waits for market conditions to improve.

MGP Ingredients says it will close two distilleries until at least May 1, 2027, as it waits for the spirits market to improve.

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MGP Ingredients closes 2 distilleries

MGP Ingredients Inc. said it will close distilling operations at its Limestone Branch Distillery in Lebanon, Ky., and Lux Row Distillers in Bardstown, Ky., for a minimum of one year beginning May 1, 2026, according to a company statement.

The company will continue distilling operations at its largest facility in Lawrenceburg, Ind., to support its brands, clients, and customers.

Closings affect 33 workers

MGP Ingredients, which was founded in 1941, said the temporary closings will affect the jobs of 33 workers at the facilities. The company is working directly with the impacted employees to support them through their employment transition, the statement said.

The company was not clear about when the facilities would reopen, only indicating that it “could be as early as 12 months after” May 1, 2026.

The closing of the distilling facilities is not expected to impact the availability of the company’s products or services to clients and customers.

While distilling halts at the facilities, other operations will continue, including warehousing, bottling and barrel programs, the April 7 statement said.

Tours, tastings, and sales continue

Visitor centers at both distilleries will remain open and continue to offer tours, tastings, retail offerings, limited-release bottles, and on-site engagements.

“The American whiskey market continues to be structurally oversupplied, with excess capacity and elevated inventory,” MGP Ingredients President and CEO Julie Francis said in a statement.

“Like many companies across the industry, we are navigating a challenging environment and taking steps to better align our operations with the current inventory levels while supporting our efficiency and productivity goals,” Francis said.

“As a result, we have made the difficult decision to temporarily idle distilling operations at these two facilities. This decision was not made lightly,” Francis said. “We are grateful for the contributions of our teams, committed to supporting those impacted, and remain confident these distilleries will continue to play an important role in our business in the future.”

MGP Ingredients’ portfolio of premium spirits brands includes Penelope, Rebel, Remus, and Yellowstone bourbons, El Mayor tequila, and Everclear, 190-proof grain alcohol. The company operates a tequila distillery in Arandas, Mexico, and has bottling operations in Missouri, Ohio, and Northern Ireland.

Breweries and wineries also close

Dozens of craft breweries have blamed declining consumption for the need to close their businesses and/or filed for bankruptcy over the last three years.

For example, award-winning Pennsylvania Brewing Company Inc., which operates as Penn Brewery, filed for Chapter 11 bankruptcy to reorganize, and Great American Beer Festival gold medal winner Olfactory Brewing closed its San Francisco brewery in December 2025, Berkeley, Calif., taproom in February 2026, and filed for Chapter 7 bankruptcy liquidation on March 4, facing unsustainable costs.

Major wineries, which blamed a decline in consumption from the Baby Boomer generation for their financial distress, have permanently closed their doors this year, including Kenwood Vineyards, E. & J. Gallo’s Ranch Winery, and Jackson Family Wines’ Carneros Hills Winery.

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