Kentucky’s storied whiskey business is facing significant difficulties, with a number of distilleries filing for bankruptcy amid mounting debt, falling demand, and uncertain global trade conditions. Last month, LMD Holdings, the parent company of the Danville-based Luca Mariano Distillery, filed for Chapter 11 bankruptcy in the Eastern District of Michigan. Court filings show that LMD Holdings is burdened with a significant amount of debt, including a “likely claim of over $25,000,000” owed to its largest creditor.
Some of the claims are under dispute, according to the Lexington Herald-Leader. Francesco Viola, the owner, stated that the bankruptcy filing, which came only weeks after the distillery’s June launch, was intended to “maximize the value of the assets for all stakeholders,” and expressed optimism about emerging successfully with the support of employees, customers, community, and creditors. The state’s bourbon and whiskey industry, estimated to be worth about $9 billion according to the Kentucky Distillers’ Association, is currently facing an array of challenges.
Factors including cost-pressured consumers, shifting preferences among young drinkers, and declining sales in key export markets are impacting the nationwide spirits industry and the thousands it employs.
Kentucky bourbon industry challenges mount
Lisa Hawkins, chief of communications at the Distilled Spirits Council of the United States, an association representing producers across the country, stated that the hardships facing distilleries are not unique to Kentucky.
“This has been an extremely difficult time for distillers across the country who are dealing with increased production costs, a slowdown in spirits sales in the U.S. marketplace, and significant disruptions to spirits exports due to the threat of tariffs and retaliation related to ongoing trade disputes,” Hawkins said. The filing by LMD Holdings follows similar financial difficulties faced by other Kentucky distilleries. Garrard County Distilling, a $250 million independent distillery that began production in early 2024, was placed in receivership and closed in April amid a failure to settle unpaid debts.
Late last year, Stoli Group USA filed for bankruptcy along with its affiliate, the Kentucky Owl whiskey brand, after a cyberattack that took down the majority of its operations and a sustained slowdown in spirits demand in the U.S.
More recently, sales of the Kentucky bourbon Wild Turkey have slumped. In its half-year results, Campari Group, which owns the brand and its Lawrenceburg and Danville distilleries, reported that sales of Wild Turkey & Russell’s Reserve had fallen 8.1 percent year-over-year “due to a soft trend for Wild Turkey in its core United States market.”
Beyond bankruptcies and financial difficulties, the American spirits and wine industry has seen a number of companies cut jobs in an effort to stay profitable. In January, Jack Daniel’s parent company, Brown-Forman, announced it would be eliminating about 12 percent of its workforce and closing a barrel-making plant in Louisville, Kentucky.
The future of both the whiskey and wider spirits industry will depend largely on the outcome of trade negotiations and the ability to adapt to changing market conditions.
