Mgp Ingredients Pauses Kentucky Distilleries as Whiskey Market Stays Oversupplied
MGP Ingredients is pausing production at two Kentucky distilleries as mgp ingredients moves to match output with current inventory levels in a whiskey market it says remains structurally oversupplied. The temporary halt affects Limestone Branch Distillery in Lebanon and Lux Row Distillers in Bardstown, with the change set to begin on May 1 and lasting as long as 12 months. The company says the move reflects weak whiskey demand, elevated inventory, and a difficult operating environment for the American whiskey business.
Two Kentucky Sites Face a Temporary Idle Period
The production pause will affect 33 employees across the two sites, and MGP Ingredients says it is working to support those workers. it could resume production at the Kentucky facilities as early as 12 months after the pause begins, depending on inventory levels and business needs.
Other activity at the distilleries will continue. Warehousing, bottling, and barrel programs are staying in place, and visitor centers at both locations will remain open with tours, tastings, and retail offerings on their full schedule.
MGP Ingredients said the decision was made to better align operations with current inventory levels while supporting efficiency and productivity goals. In its statement, Julie Francis, president and CEO of MGP Ingredients, said, “The American whiskey market continues to be structurally oversupplied, with excess capacity and elevated inventory. ” She added that the company made “the difficult decision to temporarily idle distilling operations at these two facilities. ”
mgp ingredients and the Wider Whiskey Pullback
The pause comes after other producers have taken similar steps as demand cools. Earlier this year, Suntory announced a 12-month pause at Jim Beam’s main Kentucky facility. Diageo and Brown-Forman have also announced cutbacks, underscoring how the slowdown is affecting major names across the sector.
A Kentucky Distillers Association economic assessment found that production of distilled spirits fell 28% during the first eight months of 2025 compared with the same period in 2024. MGP Ingredients said declining alcohol consumption and global tariffs have added pressure, limiting exports and weakening a market that had been lucrative for producers.
That backdrop helps explain why companies are tightening production now rather than later. Aged spirit makers must plan years ahead, which makes it harder to react quickly when demand shifts and inventories rise.
What Stays Open and What Comes Next
the pause will not affect the availability of its products or services. MGP Ingredients will keep distilling at Ross & Squibb Distillery in Lawrenceburg, Indiana, its largest facility, while continuing to produce brands including Penelope Bourbon, George Remus Straight Bourbon Whiskey, Remus Repeal Reserve, Rossville Union Rye Whiskey, Eight & Sand Blended Bourbon Whiskey, and Tanner’s Creek.
Limestone Branch and Lux Row Distillers became part of MGP’s portfolio after its $475 million acquisition of Luxco in 2021. The company has invested millions into Lux Row, including $12 million for a barrel warehouse and $4 million to boost production capacity. For now, the central question for mgp ingredients is how quickly whiskey demand and inventory levels move back into balance, and whether the Kentucky distilleries restart within the company’s stated window.
The next update will likely focus on how long the pause lasts, whether the 33 affected employees remain supported through the shutdown, and whether the broader industry sees more production cuts if the oversupply lasts.
