MGP Idles Two Kentucky Distilleries Amid Ongoing Whiskey Glut

The ripple effects of whiskey’s supply imbalance continue to spread across the industry.

MGP Ingredients announced on April 7 that it will temporarily halt distilling operations at two of its Kentucky facilities—Limestone Branch Distillery in Lebanon and Lux Row Distillers in Bardstown. The move, set to begin May 1, 2026, is part of a broader effort to align production with current inventory levels.

The Kansas-based, publicly traded company will maintain operations at its flagship distillery in Lawrenceburg, Indiana, which remains its largest production site.

According to MGP, the shutdown is expected to last at least a year, though distilling could resume sooner if market conditions improve. For now, the company is pressing pause as it works through what has become a familiar industry challenge: too much whiskey, not enough demand.

“The American whiskey market continues to be structurally oversupplied,” said CEO and President Julie Francis in the announcement. “Like many companies across the industry, we are navigating a challenging environment.”

That “challenging environment” has been building for several years. Aggressive expansion, booming demand in the late 2010s, and contract distilling growth all contributed to a surge in production. Now, the pendulum has swung the other way.

MGP’s own numbers tell the story. The company reported a 24% overall sales decline for the year, with its contract distilling business—once a major growth driver—down 53%. It also recorded a $153 million impairment tied to excess spirits inventory. Forecasts suggest 2026 may bring further declines.

While distilling will go quiet at Lux Row and Limestone Branch, the sites themselves won’t go dark.

Visitor centers at both distilleries will remain open, continuing to offer tours, tastings, retail sales, and limited releases. Warehousing, bottling operations, and barrel programs will also continue uninterrupted.

The human impact, however, is real. MGP confirmed that 33 employees across the two facilities will be affected, though the company says it is working to support them through the transition.

MGP isn’t alone in tapping the brakes.

Recent months have seen a wave of similar moves across the American whiskey landscape:

• Jim Beam plans to temporarily close its Clermont distillery for a year.

• Diageo has paused production at multiple sites, including its Tennessee and Texas operations.

• Green River Distilling has made leadership cuts amid broader uncertainty.

Even the numbers at a national level reflect the slowdown. Through August 2025, U.S. whiskey production dropped 28% year-over-year, with output down by 55 million proof gallons—the lowest level for that period since 2018.

For MGP, the decision to idle two well-known Kentucky distilleries is less about retreat and more about recalibration.

The company maintains a strong presence across its three core segments—branded spirits, distilling solutions, and ingredient solutions—and its portfolio includes recognizable names such as Penelope, Rebel, Remus, and Yellowstone.

But like much of the industry, it’s now entering a phase where discipline matters more than expansion.

The bourbon boom isn’t over—but it’s clearly evolving.