Tuesday, January 7, 2014
Future Hazy For MGP of Indiana
According to several Cincinnati news sources, there was a fire yesterday at MGP of Indiana, the former Seagrams distillery in Lawrenceburg that supplies whiskey, gin, and vodka to many non-distiller producers. Two injuries were reported. A county police dispatcher said the fire began in the dryer room. Details are still sketchy.
Also sketchy are details about the effect major corporate governance changes announced late last month will have on Lawrenceburg's future as a commodity whiskey producer. Last June, we reported that the parent company, MGP Ingredients, based in Atchison, Kansas, had postponed its 2013 Annual Meeting because of a proxy fight initiated by a voting trust that controls 75 percent of the company's voting shares. The dissident shareholders proposed a competing slate of directors. They also proposed that CEO Tim Newkirk be removed.
Early last month, the company capitulated. Newkirk was terminated and replaced temporarily by the company's CFO and VP of Engineering. The search for a new CEO is underway.
Today it was learned that Don Coffey, VP Research and Development, has left the company and his position has been eliminated. Coffey was very involved in the development and implementation of several new whiskey mash bills. He figured prominently in this November 20th post on the Whisky Advocate Blog about MGPI's future.
Although it is clear that the dissident shareholders have won (see here and here), exactly what that means for Lawrenceburg and the future of its whiskey mission is unclear. In November, MGP announced that it had completed a "review of strategic alternatives" begun last spring. It concluded that "the best approach at this time to enhance long-term shareholder value is to continue execution of the Company's strategic plan to reposition the business for profitable growth."
The subsequently-announced governance changes would seem to repudiate that conclusion, as does Coffey's departure. It seems more likely that MGP will retrench as a grain neutral spirits producer, which may jeopardize the whiskey operation.
No doubt further announcements will be forthcoming. (In fact, here they are.)