Friday, October 21, 2011

MGP Acquires LDI Distillery.

LDI, the mysterious former Seagram’s distillery that makes Redemption Rye, Templeton Rye, Bulleit Rye, and several other popular whiskeys, has finally been sold. When the deal closes, its new owner will be MGP Ingredients, Inc. The press release issued today by MGP can be found here.

‘LDI’ is an abbreviation for Lawrenceburg Distillers Indiana, which is located in Lawrenceburg, Indiana, just west of Cincinnati.

Followers of this space have read about LDI before, such as here and here. A sale has been anticipated for most of this year.

Although MGP has not announced its specific plans for the facility, MGP is a public company so greater transparency is likely going forward. MGP, which stands for ‘Midwest Grain Products,’ is a long-time and well-regarded supplier of grain neutral spirits (GNS) to the beverage alcohol industry. That suggests that they will continue and probably increase LDI’s production and sale of bulk whiskey, which will be welcome news to the many non-distiller producers who rely on LDI for their products.

Based in Atchison, Kansas, MGP has a major GNS distillery in Pekin, Illinois, near Peoria. 

MGP is buying the distillery and related assets but not the nearby bottling plant, which is being sold separately. According to MGP, that deal is imminent and the distillery sale is conditional on its completion.

Not mentioned in the press release is another associated asset, LDI’s grain division in Rushville, Indiana.


Craig H. said...

Hi Chuck

longtime reader of your site here. I live in Cincinnati, about 20 minutes from LDI. I'm wondering if you have any insight as to what this sale of LDI to MDP means for the future of the Distillery? Do you think that the new owners will continue producing whiskey (among other distillates) here, or are they just purchasing the facility for it's stocks of whiskey?

Also, why wouldn't MGP purchase the bottling plant? Who would want to purchase that bottling plant if LDI's new owners don't want it??

For some reason I just don't have a warm and fuzzy feeling about the distillery's future. The plant is the last of what used to be many distilleries that were located in the Greater Cincinnati area, and I would hate to see this piece of living history go by the wayside.

Chuck Cowdery said...

They say they're buying it for the whiskey component. They are a bulk producer and will likely continue to be that. I don't see them developing and selling their own products. That's why they don't need the bottling line, that's not their business, but there are plenty of stand-alone bottlers. It's just a different business.

Supposedly, sale of the bottling house is imminent.

What LDI needs is a parent who has the means and willingness to invest in the facility and its business. MGP has the means. We'll have to wait and see if they have the will.

I don't know if this sale will bring LDI back to prosperity, but it's a step in the right direction.