Celebrity brand whiskey distillery enters Chapter 7 liquidation

While the actual decline is relatively small, even a slight drop in overall liquor sales can have a devastating impact on the industry.

"Active U.S. craft distillers dropped from 3,069 in August 2024 to 2,282 in August 2025. Seven hundred and eighty-seven fewer operations in a single year," according to The American Craft Spirits Association .

The number of active craft distillers has fallen sharply, and overall spirits sales have also declined. DISCUS CEO Chris Swonger, however, wants to put a positive spin on the decline.

"While total U.S. spirits sales edged down 2.2% in 2025, the spirits industry remains resilient, driven by innovative products that continue to spark consumer interest," he said in a press release .

"Against a challenging backdrop of weakening consumer confidence and persistent economic pressures, American adults continue to choose distilled spirits, with ready-to-drink cocktails standing out as a clear favorite."

That's one way to look at it, but the industry has been losing players, and now another distillery has filed for Chapter 7 bankruptcy.

Blue Spirits Distilling filed Chapter 7 bankruptcy

While many distilleries have filed Chapter 11 bankruptcy in an effort to restructure operations, Blue Spirits Distilling moved right to a Chapter 7 Bankruptcy. That means its assets will be liquidated, but exactly how that will happen remains a question.

The formal filing was made on June 11, according to court documents on Pacer Monitor , but the process remains unresolved.

"The Chelan-Douglas Regional Port Authority is waiting for the bankruptcy process to determine what happens next at the former Blue Spirits Distilling operation in the Cashmere Mill District, where the doors are locked, and company property remains inside the Port-owned facility," NCW News reported.

Another beloved beer brand files for Chapter 11 bankruptcy

Another popular brewery files Chapter 7 bankruptcy

Popular beer brand abruptly closes, liquidates everything

Although the company was based in Washington state and operated a now-closed tasting room there, its products were sold regionally. The distilleries' financial woes go back a few years.

"In 2022, commissioners approved a temporary rent deferral for Blue Spirits at the Mill District after the company reported financial challenges. At the time, Blue Spirits had made substantial investments in improvements to the Port-owned property as one of the original anchor tenants," according to NCW News.

Blue Spirits Distilling Chapter 7 at a glance