Struggling whiskey brand files for bankruptcy, closes

Alcoholic beverage industries have faced financial distress over the past three years, leading to bankruptcy filings.

The reasons for the industries' economic problems have included fallout from the effects from the Covid-19 pandemic, rising inflation, higher interest rates and changing industry landscape.

The U.S. beer market struggled in 2023, shrinking by 5.1% in volume, according to a 2023 annual report from the Brewers Association. Craft brewery closings have been steadily rising annually from 97 in 2016 to 418 in 2023 for a total of about 2,036 over the eight-year period.

Suppliers of whiskey, vodka, gin and other spirits have had disappointing results as well, reporting flat sales in 2023 with a 0.2% increase as volumes only rose 1.2%.

Colorado-based Lee Spirits Co., a distiller of premium gin, vodka and liqueurs, on March 8 filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Colorado after shutting down all operations four days earlier, including its Colorado Springs tasting room, Brooklyn's on Boulder Street.

The distiller on March 4 revealed on social media that it had ceased operations as it could not overcome the prolonged impact of the Covid-19 pandemic and "the ever-changing industry landscape."

Montana Distillery, which produces a dozen varieties of vodka, gin and whiskey, in April filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Montana, four years after relocating to hopefully cut expenses and survive.

The debtor faced rising costs and property taxes and decreased revenues caused by the Covid-19 pandemic when it relocated its Missoula, Mont., distillery business, to Stevensville, Mont., in August 2020 and opened its tasting room on Christmas Eve 2020.

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After four years of trying to succeed in its new location, negative economic factors pushed the company to file bankruptcy.

A woman pours a measure of whiskey into a glass. (Photo by Matthew Horwood/Getty Images)
Matthew Horwood/Getty Images

Mackmyra files bankruptcy and shuts down

Finally, Mackmyra Svensk Whisky, a 25-year-old Swedish whiskey distillery, on Aug. 19 filed for bankruptcy in the Gävle District Court in Sweden, handing control of the company to a bankruptcy trustee with plans to cease operations, The Drinks Business reported.

"It is with great sadness that we must state that it is unfortunately not possible to continue the company's operations," company chairman Peter Ski reportedly said in a statement.

"The company management and board have struggled hard to come to terms with the company profitability and cash flow," Ski said. "Despite the fantastic work of both staff and management, it is still not possible to continue.”

Ski took over as chairman just over a year ago focusing on finding a long-term solution to Mackmyra's financial problems. He said in the statement that he did not have enough time to find a solution.

“I sincerely hope that the bankruptcy trustee now has the chance to do something constructive with the values in the company and secure the Mackmyra brand and its 25-year history," Ski said.

Mackmyra's total production capacity was about 2.4 million bottles. It had reported a 13% decline in revenue in its first quarter 2024 results

The distiller had recently partnered with Microsoft and Finnish tech consultancy Fourkind on the creation of the first artificial intelligence-generated blend.

The company had also on Aug. 15 relaunched in the U.K. with Summerton Whisky Club as its distributor.

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