America’s spirits industry hit again as two iconic brands shut down…. amid ‘lake’ of unsold booze
America’s spirits industry continues to sober up as the US finds itself with far too much booze and not enough people drinking it.
Stoli vodka and Kentucky Owl bourbon are shutting down, the latest high-profile casualties of the Gen Z-led trend to drink less and foreign countries rejecting American-made alcohol.
Parent company Stoli Group said on Friday its US vodka and bourbon businesses are being liquidated after a bid to turn them around failed.
Kentucky Owl built a cult following with limited-run bourbons that could sell for as much as $400 a bottle.
Meanwhile, Stoli became a nightclub and bar staple as well as a being popular in stores where a standard 750ml bottle sold for around $20.
The vodka was sold in the US as Stolichnaya — which roughly translates as 'capital city' in Russian — in the US until 2022. But the company rebranded as Stoli following Russia's invasion of Ukraine, and widespread boycotts of Russian-branded items.
The company said its troubles began after its public support for Ukraine. Its assets were seized in Russia and the company alleged that a massive cyberattack had undermined its US production facilities.
But the collapse is also part of a much bigger problem facing American spirits makers.
Gen Z are drinking far less alcohol than older generations (pictured: a Stoli Vodka event in New York)
Parent company Stoli Group said on Friday its US vodka and bourbon businesses are being liquidated after a bid to turn them around failed
Mila Kunis, Jim Beam’s global brand partner, surprises fans at Citi Field’s Jim Beam Bourbon Bar during a New York Mets game in July 2018
After years of booming sales, the industry is now drowning in excess alcohol left over from the pandemic drinking surge. Warehouses are packed with bottles and barrels that consumers are no longer buying at the same pace.
Americans are drinking less overall, especially younger adults, while exports have slumped sharply as trade tensions and boycotts hit overseas demand.
The result is what industry insiders describe as a growing ‘lake’ of unsold booze — and a wave of cutbacks, closures and bankruptcies across the whiskey and vodka industry.
Diageo, Pernod Ricard, Campari, Brown Forman and Rémy Cointreau, the five largest alcohol producers, are reportedly stuck with $22 billion worth of aging inventory, according to Financial Times.
They are behind household names like Johnnie Walker, Smirnoff, Absolut, Jack Daniel’s and Hennessy.
It is a pileup that begin with overproduction to meet demand during the Covid-19 pandemic.
Since then, ongoing trade conflicts between the US and its global partners have led to a dramatic drop in exports, according to the Distilled Spirts Council of the United States
The council's mid-year report found a 9 percent drop in 2025 exports, with the steepest declines in Canada.
Stoli became a nightclub and bar staple as well as a being popular in stores where a standard 750ml bottle sold for around $20 (pictured: Women advertising Stoli at an event in New York)
Kentucky Owl built a cult following with limited-run bourbons that could sell for as much as $400 a bottle
A sign urging shoppers to ‘Buy Canadian Instead’ in a Canadian retailer. US bourbon has been hit hard by a Canadian backlash linked to tariffs.
The backlash in Canada against President Donald Trump's trade policies was partly blamed for the closure of a historic Jim Beam bourbon distillery in Kentucky at the end of 2025.
Smaller producers have been hit even harder.
AM Scott Distillery in Ohio filed for bankruptcy in December, while Luca Mariano Distillery in Danville, Kentucky, collapsed last summer under roughly $25 million in debt.
Stoli and Kentucy Owl first filed for Chapter 11 bankruptcy in November 2024, which allowed them to keep operating while they tried to fix their finances.
That effort has now failed. The cases have been converted to Chapter 7 bankruptcy, meaning the companies are being shut down completely.
