The spirits distilling industry has faced an array of economic issues since the Covid-19 pandemic subsided, which in some cases forced businesses to file for bankruptcy.
Distillers have reported a decline in demand for alcohol and spirits after recovering from the pandemic, beginning in 2023 and continuing through 2024.
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On top of a decline in demand, distillers have dealt with increased operating costs and inflation in the global economy.
Related: Another iconic restaurant chain files for Chapter 11 bankruptcy
Some companies faced some unique issues that forced them into bankruptcy.
Stoli USA, which distills vodka and other spirits, on Nov. 27, 2024, filed for Chapter 11 bankruptcy after financial distress led to a default on $78 million in secured debt owed to Fifth Third Bank NA.
In addition to a decline in demand, increased operating costs and a lending dispute with the bank, Stoli said a severe data breach and ransomware attack in August 2024 contributed to its decision to file for bankruptcy.
Distilleries file for bankruptcy
In the case of Colorado-based Lee Spirits Co., a distiller of premium gin, vodka and liqueurs, the Covid-19 pandemic was too much for it to recover from. The debtor on March 8, 2024, filed for Chapter 11 bankruptcy after shutting down all operations four days earlier.
Lee Spirits said 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, filed for Chapter 11 bankruptcy on April 29 and shut down operations four years after relocating to another city, seeking to cut expenses and survive.
The debtor faced rising costs and property taxes and decreased revenues caused by the Covid-19 pandemic when it relocated the business from Missoula, Mont., to Stevensville, Mont.
Popular whiskey brand Boston Harbor Distillery files for Chapter 11 bankruptcy.
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Boston Harbor Distillery files for bankruptcyÂ
And now craft spirits producer Boston Harbor Distillery, which makes whiskey, rum. gin, liqueurs, and distilled beer, filed for Chapter 11 bankruptcy protection, seeking to reorganize its business.
Related: Controversial theme park owner files for Chapter 11 bankruptcy
The Dorchester, Mass.-based debtor filed its petition on March 31 in the U.S. Bankruptcy Court for the District of Massachusetts, listing $500,000 to $1 million in assets and $1 million to $10 million in debts.
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The debtor’s largest creditor is Cheers Investment LLC, owed over $1 million of a personal investment. Other creditors include Northeast Bank, law firm Nutter McClennen & Fish, and various companies in the beverage distribution industry, according to the petition.
Boston Harbor Distillery was established in 2012 by Samuel Adams brewer Boston Beer Company’s co-founder Rhonda Kallman, a leader in the craft beverage industry.
The distillery occupies a historic building in Dorchester that was built in 1859 and housed a hot-forged horse nail maker that supplied both sides in the Civil War. The building subsequently was occupied by George Lawley & Son Shipyard and a Seymour’s Ice Cream factory.
In addition to its flagship distillery, the company operates Boston Harbor Distillery’s cocktail lounge and restaurant at Logan International Airport’s International Terminal E in partnership with SSP Travel America.
Boston Harbor Distillery’s products include Putnam New England Whiskey, Demon Seed Whiskey, Lawley’s Small Batch Gin, Lawley’s New England Rum, Pre-Batched Craft Cocktails, Boston Harbor Cream & Coffee Liqueurs, and Spirit of Boston Distilled Samuel Adams beer.
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