Kentucky’s legendary whiskey activities face significant difficulties, with a number of distilleries fileing for bankruptcy, a drop in demand and uncertain global commercial conditions.
Last month, LMD Holdings, the parent company of the Luca Mariano distillery, based in Danville, deposited a bankruptcy of chapter 11 in the Oriental District of Michigan, where it is recorded.
Nowsweek contacted the company by email for comments.
Why it matters
The Bourbon and State Whiskey industry – estimated at around $ 9 billion, according to the Kentucky Distillers’ Association – is currently faced with a range of challenges. Many, including consumers pressed by costs, changing preferences among young whiskey drinkers and the potential ramifications of tariffs on sales on the main export markets, also have an impact on the national spirits industry and the thousands it uses nationally.
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What to know
Judicial deposits show that LMD Holdings is overwhelmed by a significant amount of debt, including a “probable complaint of more than $ 25,000,000” to its greatest creditor. Some of the complaints are disputed, according to the Lexington Herald-Leader.
The owner Francesco Viola told the newspaper that the bankruptcy deposit, which came only weeks after the launch of the June distillery, was intended to “maximize the value of assets for all stakeholders” and that the company was “ready to successfully emerge, ideally with the support of its employees, customers, community and creators”.
The deposit follows similar reports on other Kentucky distilleries faced with financial difficulties.
Garrard County Distilling, an independent $ 250 million distillery that began production at the beginning of 2024, was placed on the receiver and was closed in April in the middle of the failure of unpaid debts.
At the end of last year, Stoli Group USA filed its bankruptcy with its affiliate, the Kentucky Owl Whiskey brand. This followed a sustained slowdown in the demand for spirits in the United States, according to CNN, as well as a cyber attack which has shot down the majority of its operations.
More recently, sales of the wild turkey from Kentucky Bourbon have dropped. In its half -yearly results, Campari Group, owner of the brand and its distilleries of Lawrenceburg and Danville, said that sales of the Turkey and Russell reserve had dropped 8.1% in annual shift “due to a gentle trend for wild turkey in its main American market”.
Beyond bankruptcy and financial difficulties, the American spirits and wine industry has also seen a number of companies reducing jobs in order to remain profitable in an increasingly uncertain commercial environment. In January, Jack Daniel’s parent company, Brown-Forman, announced that it would eliminate around 12% of its workforce and close a barrel manufacturing plant in Louisville, Kentucky.
What people say
The owner of the Luca Mariano Francesco Viola distillery, in a declaration to the Lexington Herald-Leader:: “We have submitted a file to maximize the value of the assets for all stakeholders. Luca Mariano Distillery and LMD Holdings have a prosperous commercial model, resisted the previous economic challenges of our industry and are ready to successfully emerge, ideally with the support of its employees, customers, community and creditors.”
