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, where it is registered.

Newsweek has contacted the company via email for comment.

Why It Matters

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. Many, including cost-pressured consumers, shifting preferences among young drinkers away from whiskey and potential ramifications of tariffs on sales in key export markets, are also impacting the nationwide spirits industry and the thousands it employs nationwide.

What To Know

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.

Owner Francesco Viola told the paper 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 that the company was “poised to emerge successfully, ideally with the support of its employees, customers, community and creditors.”

The filing follows similar reports of other Kentucky distilleries facing financial difficulties.

Garrard County Distilling, a $250 million independent distillery that began production in early 2024, has been 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. That followed a sustained slowdown in spirits demand in the U.S., according to CNN, as well as a cyberattack that took down the majority of its operations.

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 also seen a number of companies cut jobs in an effort to stay profitable in an increasingly uncertain trading environment. 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.

What People Are Saying

Luca Mariano Distillery owner Francesco Viola, in a statement to the Lexington Herald-Leader: “We filed to maximize the value of the assets for all stakeholders. Luca Mariano Distillery and LMD Holdings have a successful business model, have weathered the prior economic challenges in our industry, and are poised to emerge successfully, ideally with the support of its employees, customers, community and creditors.”