Liquor industry struggles grow with another Chapter 7 filing

The liquor industry continues to face challenges, as another distillery filed for Chapter 7 bankruptcy, further underscoring the financial struggles within the sector. In August 2025, the number of active U.S. craft distillers decreased from 3,069 to 2,282, according to the American Craft Spirits Association. Despite this decline, the spirits industry's CEO, Chris Swonger, remains optimistic, attributing the dip in sales to 2.2% in 2025, while highlighting the resilience of the industry due to innovative products attracting consumer interest.

However, another distillery, Blue Spirits Distilling, has now joined the list of struggling businesses, filing for Chapter 7 bankruptcy on June 11, 2026. This means that its assets will be liquidated, leaving questions about the future of its operations. The Chelan-Douglas Regional Port Authority is currently awaiting the outcome of the bankruptcy process to determine the next steps.

The financial difficulties of Blue Spirits Distilling are not a new issue; the company had sought a temporary rent deferral in 2022 due to financial challenges and had previously operated in multiple names, including Coral Cay Distilling, Blue Spirits Brewery, and Blue Spirits Winery. The company held exclusive distribution rights for Tommy Bahama Spirits before its partnership with Luctor International collapsed in 2020.