Iconic American industry hit with wave of bankruptcies as companies scramble amid plunging demand
The latest to fall the owner of the Luca Mariano Distillery in Danville, Kentucky, which filed for Chapter 11 bankruptcy last month with an estimated $25 million in debt.
Owner Francesco Viola said he hopes the business can 'emerge successfully, ideally with the support of its employees, customers, community and creditors.'
Luca Mariano follows the high-profile collapse of Garrard County Distilling, a $250 million independent Kentucky distillery that was placed into receivership and shut down in April after defaulting on debt.
And in late 2023, the iconic Kentucky Owl, founded in 1879, also filed for bankruptcy — citing slumping sales and a crippling cyberattack that halted operations.
Sales are drying up as price-sensitive and health-conscious American consumers pull back on spirits.
Campari-owned Wild Turkey saw an 8 percent decline in US sales during the first half of 2025, while Jack Daniel's dropped 6 percent year-over-year.
In January, Jack Daniel's parent company Brown-Forman announced layoffs affecting 12 percent of its workforce and the closure of a major barrel-making facility in Louisville.
'Recent indicators point to a moderation in growth prospects, with declining business confidence and rising economic policy uncertainty, exacerbated by escalating trade tensions,' the company said in its report.
'The United States's newly announced tariffs, and the threat of retaliatory measures, add to the volatility...The United States beverage alcohol sector is among those at risk, while the full effects remain complex and unclear,' the report stated.
The US announced EU imports would be hit with a 15 percent duty, but it is not yet clear what European tariffs on American goods will be.
Jack Daniel's Tennessee Whiskey also fell 6 percent year-over-year, its latest report revealed.
In January its parent company Brown-Forman said it would be eliminating roughly 12 percent of its workforce and closing one of its major barrel-making plants in Louisville, Kentucky.
'This has been an extremely difficult time for distillers across the country who are dealing with increased production costs, a slowdown in spirits sales in the U.S. marketplace, and a significant disruption to spirits exports due to threat of tariffs and retaliation related to ongoing trade disputes,' the Distilled Spirits Council of the United States told Newsweek.
Another major hurdle for this industry is that Canada, the US spirits second largest export market, is keeping whisky off its store shelves in protest at Trump's punitive trade policies against the nation.
Well-known Kentucky whisky business Garrard County Distilling collapsed in the spring
It's not just Kentucky whisky that is suffering as a result of a general consumer pullback from alcohol.
In June the largest alcohol distributor in the US has announced it is pulling out of California, blaming rising costs of doing business in the state.
Texas-based Republic National Distributing has said that it will no longer do business in California after September 2. This has sent more than 2,500 drinks brands scrambling to find a new wholesaler and distributor in the state, which is famous in large part for its wine production.
The departure of a wholesale giant from the largest wine market in the US is also a warning sign for an industry which is already struggling
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