Dec. 25, 2025Updated Dec. 26, 2025, 7:30 a.m. ET
You’ll have to excuse distillers and spirits makers if they need a stiff drink this holiday season.
The past year has dealt makers of whiskey and other liquor a mix of challenges – from Americans cutting back on their alcohol consumption for health and spending reasons to declining exports hampered by trade issues and tariffs.
It’s not just restaurants and retailers hit with bankruptcies in 2025. Several distilleries across the U.S. filed for bankruptcy this year with the most recent of them being A.M. Scott Distillery, which was founded in 2022 in Troy, Ohio. The distiller, which operates a location in Dayton, filed for Chapter 11 on Dec. 22.
Earlier this year, other bankruptcy filings included the Luca Mariano Distillery, in Danville, Kentucky, and its parent company, LMD Holdings, which filed in August; Devils River Distillery of San Antonio and JJ Pfister Distilling Co. of Sacramento, Calif. (both in May); House Spirits Distillery of Portland, Oregon (April); and Boston Harbor Distillery of Boston and Lee Spirits Co. of Monument, Colo. (both in March).
A decline in alcohol consumption is partly to blame for bankruptcies, as a record low percentage of U.S. adults (54%) say they consume alcohol, according to a Gallup poll from August. That’s down from 58% in 2024 and 62% in 2023, according to Gallup.
Among those who do drink, the average number of drinks consumed over the past seven days is 2.8, the lowest figure Gallup has recorded since 1996. It had measured about 4 drinks per week over the past eight years.
Consumption in the U.S. isn’t the only concern for spirits purveyors. Trade tensions including tariffs have contributed to a 9% decline in spirit exports during the second quarter of 2025, compared to a year ago, according to the Distilled Spirits Council of the United States’ mid-year exports report.
Exports to the E.U., the U.K. and Japan fell during the period, but exports to Canada fell the most, plummeting 85% to below $10 million in the second quarter, according to DISCUS. A majority of Canadian provinces had banned American spirits from their shelves in response to U.S. tariffs targeting Canada, although the country removed retaliatory tariffs in September.
“There’s a growing concern that our international consumers are increasingly opting for domestically produced spirits or imports from countries other than the U.S., signaling a shift away from our great American spirits brands,” said Chris Swonger, DISCUS President and CEO, in a statement accompanying the report.
Jim Beam distillery to pause operations for 2026. US-Canada trade tensions to blame?
Jim Beam is pausing operations at its main distillery in Clermont, Kentucky for an indefinite period beginning in January 2026. “We are always assessing production levels to best meet consumer demand and recently met with our team to discuss our volumes for 2026,” company officials told The Louisville Courier Journal, part of the USA TODAY Network, on Dec. 21.
The U.S.-Canada trade tiff could be a contributing factor, Canadian businessman and “Shark Tank” judge Kevin O’Leary told NewsNation. “This is a self-inflicted mess,” he said in a post on X. “When a major bourbon producer shuts down for a year, that’s not the market talking, that’s politics getting in the way of common sense.”
“Tariff games” hurt “businesses on both sides of the border,” O’Leary said.
Beer makers dealing with declines, too
Brewers haven’t been immune either. Most recently, Rogue Ales & Spirits in Oregon shut down on Nov. 14 and filed for bankruptcy on Nov. 24. The brewery, founded in 1988, “was for decades known largely for its innovation and experimentation,” wrote The Beer Bible author Jeff Alworth on his Beervana blog.
Another longtime industry player, the Iron Hill Brewery & Restaurant chain, founded in November 1996 in Newark, Delaware, filed for bankruptcy in October.
This will be the second consecutive year in which brewery closings outpaced brewery openings, according to the Brewers Association. So far, the trade group has tracked 268 new brewery openings and 434 closings. There are 9,778 small and independent breweries in the U.S., according to the trade group.
“Changing consumer behaviors, retailer rationalization, cost increases due to inflation and tariffs, and more competition than ever have been compounding difficulties in 2025,” said Matt Gacioch, staff economist at the Brewers Association, in a 2025 Year in Beer report. “And still, brewers are stepping up to meet today’s challenges head on by adjusting their offerings and, sometimes, their entire business models.”
Beer sales were down 3.1% in dollars for the first half of 2025, according to data firm NIQ’s tracking of sales in U.S. supermarkets, drug stores, mass-merchandise stores, convenience stores and liquor stores for the 52-week period ending July 5, 2025. Wine sales dipped 5.9% and spirits fell 2.8%.
A growing segment? Ready-to-drink cocktails, which were up 1.7% in sales.
All this coincides with a boom in non-alcoholic beer, wine and spirits, a category that’s continued to grow after a 27% increase in 2024 to $829.2 million in sales, according to NIQ.
Consumers are drinking less alcohol for reasons including their health and budgets, Dave Williams, vice president of analytics and insight for Bump Williams Consulting, a Connecticut firm that specializes in the alcoholic beverage industry, told USA TODAY in September.
“There’s a lot of concern around discretionary income,” he said. “Either trying to save money, trying to cut back on spending, or just having to make different decisions on the frequency or volume side.”
Contributing: Reuters.
Mike Snider is a national trending news reporter for USA TODAY. You can follow him on Threads, Bluesky, X and email him at mikegsnider & @mikegsnider.bsky.social & @mikesnider & msnider@usatoday.com.