MGP Ingredients Faces Securities Class Action Over Whiskey Market Disclosure Claims

A class action lawsuit filed against MGP Ingredients alleges the major whiskey producer failed to properly disclose market information about industry-wide oversupply and declining consumption trends. The legal action, covering May 2023 to October 2024, follows significant stock price drops after revelations about inventory problems.
Like Conversation
MGP Ingredients, one of America’s largest whiskey producers, faces a class action lawsuit over claims it failed to disclose crucial market information about industry oversupply issues.

A securities class action lawsuit has been filed against MGP Ingredients, Inc. in the United States District Court for the Southern District of New York, representing investors who purchased company stock between May 2023 and October 2024.

The lawsuit alleges MGP Ingredients failed to properly disclose information about a slowdown in consumption and oversupply in their brown goods portfolio, which includes American whiskies and tequila products.

Signup now to make sure you don't miss out on the latest whiskey news and deals.

By Signing up, you accept and agree to our Terms of Services and you acknowledge our Privacy Statement. The Whiskey Wash is protected by reCAPTCHA, and the Google Privacy Policy and Terms of Service apply.

The impact on MGP Ingredients’ stock has been significant. The company’s February 2024 guidance announcement fell 4.9% below analyst consensus, with President and Chief Executive Officer David S. Bratcher confirming that “inventory destocking at a wholesale level will remain an issue for the branded spirits industry in 2024.” The stock dropped $13.65 per share that day.

Further developments in October 2024 saw MGP Ingredients admitting to soft demand and high inventories, followed by Wells Fargo citing “credibility issues” in their analysis. The stock fell $19.71 per share after these announcements. By October 31, when MGP Ingredients disclosed that excess inventories would have an “even greater impact” on 2025 sales, shares dropped another $8.27.

What This Means for Whiskey Consumers

As whiskey lovers, we’re all too familiar with rising prices and limited availability of our favorite bottles. This market correction and oversupply situation at MGP Ingredients might seem like welcome news – after all, who hasn’t wished for more affordable whiskey? But let’s not get too excited just yet.

While market oversupply typically points toward better pricing and increased availability, the reality might be more complex. Yes, there’s excess inventory in the system, but MGP Ingredients’ planned scaling back of operations could mean we’re looking at another supply swing in the years ahead. We’ve seen this cycle before in the industry – feast followed by famine.

Industry Impact

The situation at MGP Ingredients sends ripples beyond their own balance sheet. As a significant supplier in the American whiskey market, their production decisions have widespread implications for the industry.

The company’s plans to scale back operations in response to these challenges could impact both established brands and craft distillers who source their whiskey. With MGP Ingredients warning that excess inventories will have an “even greater impact” on sales in 2025 than previously indicated, we might see significant changes across the industry’s supply chain.

SOURCE: ABC4.com

The Whiskey Wash Team

The Whiskey Wash Team brings together certified spirits specialists, industry experts, and passionate whiskey writers delivering authoritative coverage of the global whiskey landscape. With deep expertise in bourbon, Scotch, Japanese whisky, and emerging world expressions, the team combines technical knowledge with engaging storytelling. Through news, reviews, and in-depth features, we help both newcomers and connoisseurs navigate the complex world of whiskey, sharing the heritage, innovation, and craftsmanship that makes each bottle unique. Our mission is to inform, educate, and build community through trustworthy, accessible content that serves whiskey enthusiasts worldwide.

All Posts
Search
  • Latest News
  • Latest Reviews