Major Spirits Brands Are Sitting on a $22B Glut of Unsold Inventory
The slowdown in consumer demand for spirits is a global problem that has led to a glut of aged spirits at companies around the world, according to a recent report from the Financial Times, And it’s not just whiskey (and whisky): Brands that make Cognac, tequila, and rum are dealing with this issue as well and will likely be forced to cut prices (not exactly a bad thing for consumers, it should be noted).
Five major drinks companies—Diageo, Pernod Ricard, Campari, Brown-Forman, and Remy Cointreau—together are sitting on about $22 billion worth of aged spirits, which is the largest amount of unsold inventory they’ve had in a decade, the new report says. While the debate continues about what exactly might be causing this glut, the article points to the pandemic when people were drinking a lot more at home (understandably) and producers were encouraged to increase production. Still, considering that many whiskies, particularly scotch, are aged for at least 10 years, there is something more to the story.
People are indeed drinking less, spurred on by health concerns and a shift to THC beverages (although here in America the Trump administration has rolled back the language about alcohol’s negative health impacts, much to the chagrin of many doctors and scientists). Also, the increased consumption during the pandemic was a bubble created by external factors that no one could have forecasted, so perhaps companies were a bit too bullish about increasing production based on that.
We’ve covered the effects that the global slowdown of the spirits market, as well as tariffs has had on whiskey—Diageo has paused production at distilleries in America and Scotland, as well as malting houses; Jim Beam won’t be making any whiskey at one of its main distilleries for all of 2026; Brown-Forman sold a cooperage and cut its global workforce, as well as closing one of its scotch distilleries. But according to the Times, Cognac is facing a particularly rough time. Exports have slowed down and France is having trade issues with China, causing producers to lower prices in an attempt to unload aged expressions. Even tequila, which not so long ago outpaced sales of American whiskey in the U.S., is being hit hard.
Of course, the reaction to a slowing market carries its own risks. We don’t yet know if this is a blip or a new reality, and if companies are cutting back on production and interest begins to rise again, they could be faced with a shortage and decide to raise prices. “If you cut inventory during a downturn, you have huge problems when you’re trying to satisfy demand in the future,” Jefferies analyst Edward Mundy told the Times. “Ultimately, there’s an element of human judgement—you just don’t know what demand will look like in five years’ time.” At the moment, it might be a good time to stock up on your favorite bottles if you see them at a discounted price, given all of this uncertainty. And don’t worry, your whiskey won’t go bad.
