MGP Ingredients Class Action Lawsuit Filed

Class Action Lawsuit Filed Against MGP Ingredients, Inc. (MGPI) Seeking Recovery for Investors

Who Is MGP Ingredients and What Do They Have To Do With Bourbon?

MGP Ingredients is an American company that operates in the spirits and food industries. They are a significant producer of distilled spirits, supplying a wide variety including bourbon and rye whiskey, vodka, and gin to other distilleries and spirit brands. In addition to producing spirits for others, MGP also owns and markets its own brands, such as George Remus Bourbon and Rossville Union Rye. Furthermore, leveraging their expertise in grain processing, they produce a range of food ingredients derived from wheat and peas, including specialty starches and proteins, which are used in various food applications.

MGP Lawsuit Seeks To Recover Losses Due To Alleged Securities Fraud

(Excerpt from: Levi & Korinsky, LLP via PR Newswire¹)

The MGP lawsuit seeks to recover losses on behalf of MGP Ingredients, Inc. investors who were adversely affected by alleged securities fraud between May 4, 2023 and October 30, 2024. According to the filed complaint, throughout the class period, defendants made materially false and/or misleading statements, and failed to disclose material adverse facts about MGPI’s business, operations, and prospects. Specifically, defendants repeatedly touted a strong demand and “normal” inventory levels in brown goods (i.e., American whiskies and tequila), when in fact there had been a slowdown in consumption and oversupply in their products. Worse, defendants had assured investors that they were positioned differently than their competitors, and that this was a non-issue, because MGPI had already taken steps to mitigate the risk, when in fact it had not. (Source: Levi & Korinsky, LLP via PR Newswire)

More details and timeline from Robbins Geller Rudman & Dowd LLP – MGP Lawsuit

(Excerpt from Robbins Geller Rudman & Dowd LLP announcement²)

The MGP Ingredients class action lawsuit further alleges that on February 22, 2024, MGP Ingredients revealed fiscal year 2024 full-year revenue guidance of $749 million at the midpoint, 4.9% below street consensus, and confirmed that recent industry reports indicated “inventory destocking at a wholesale level [will] remain an issue for the Branded Spirits industry in 2024.” On this news, the price of MGP Ingredients common stock fell nearly 15%, according to the complaint.

The MGP Ingredients class action lawsuit further alleges that on October 17, 2024, MGP Ingredients reported financial results for the third quarter of fiscal year 2024, revealing that sales were expected to decline 14% from the prior year’s third quarter and that guidance was revised downward. On this news, the price of MPG Ingredients common stock fell nearly 30% over three trading sessions, according to the complaint.

Finally, on October 31, 2024, the MGP Ingredients class action lawsuit further alleges that defendants admitted that “slower growth and higher inventories are leading to lower demand, lower prices and reduced visibility on our contract distilling sales.” On this news, the price of MGP Ingredients common stock fell nearly 15%, according to the complaint.

MGP Cuts Whiskey Production

This MGP class action lawsuit follows other recent actions by MGP. In their Third Quarter Results Report, David Bratcher, CEO and president of MGP Ingredients said “In response to the softening American whiskey category trends and elevated industry-wide barrel inventories, in 2025 we plan to further lower our net aging whiskey put away, scale down our whiskey production, and optimize our cost structure to mitigate lower production volumes.”³ In addition, earlier this year, MGP Ingredients closed their grain neutral spirits and industrial alcohol distillery in Atchison, KS.⁴

Sources (MGP Class Action Lawsuit):
1. PR Newswire: https://prnmedia.prnewswire.com/news-releases/class-action-filed-against-mgp-ingredients-inc-mgpi-seeking-recovery-for-investors–contact-levi–korsinsky-302336786.html
2. Robbins Geller Rudman & Dowd LLP: https://www.rgrdlaw.com/cases-mgp-ingredients-inc-class-action-lawsuit-mgpi.html
3. MGP: https://www.mgpingredients.com/more-information/news-press/news-releases/mgp-ingredients-reports-third-quarter-2024-results.html
4. MGP: https://www.mgpingredients.com/more-information/news-press/news-releases/mgp-ingredients-announces-planned-closure-grain-neutral-1
5. Robb Report: https://robbreport.com/food-drink/spirits/indiana-distillery-mgp-cutting-back-on-whiskey-production-1235981496/

If you would like to learn about some of MGP’s whiskeys, check out our Remus Highest Rye Straight Bourbon Whiskey Review and our Remus Repeal Reserve Series VIII Review.

Would you like to learn more about distilleries and bourbon? Are you planning a trip to Kentucky Distilleries? Maybe you would like to live the bourbon life vicariously through us? If any of these are true, then check out BourbonObsessed.com today!