MGP Ingredients to close Kansas distillery

Spirits producer MGP Ingredients will close its distillery in Kansas due to headwinds facing its grain-neutral spirits.

The distillery, located in Atchison in Kansas, US, was making grain-neutral spirits and industrial alcohol. It is expected to close in January 2024, the company said.

MGP Ingredients said the decision had been made to ‘address profitability headwinds’ associated with its grain-neutral spirits and industrial alcohol products within the firm’s ‘Distilling Solutions’ sector.

However, the company said it would continue to operate and invest in its Ingredient Solutions business in Atchison, including the planned US$16.7 million texturised protein facility that is due to be ready by the end of the year.

David Colo, president and CEO of MGP Ingredients, said: “After careful deliberation, we have concluded that the closure of our Atchison distillery is a necessary step to further align the product categories we participate in and their supporting operations, consistent with our long-term strategic objectives.

“The additional supply of grain-neutral spirits and industrial alcohol that has entered the market during the past few years has had a meaningful and structural impact on the market.

“Combining these market factors with the increase in local corn basis costs during this time frame has resulted in these product lines no longer being economically viable for the company.

“The decision to close the Atchison distillery unfortunately represents the best path forward. We are grateful for the unwavering support and contributions of our distillery employees, customers, suppliers, and the people of Atchison.

“We are committed to ensuring a smooth transition as we wind down operations at the distillery between now and the end of the year, and we look forward to continuing to support the Atchison community.”

In April 2021, MGP Ingredients completed its US$475m acquisition of Luxco.