(KAIR)--MGP's Atchison distillery is set to close at the start of next year.

That's according to a release issued by the company Thursday, which calls the decision to close "consistent with the Company's plan to address profitability headwinds associated with its grain neutral spirits and industrial alcohol products within its Distilling Solutions segment."

The release clarifies that MGP "will continue to operate and invest in its Ingredient Solutions business located in Atchison, Kansas, including the previously announced $16.7 million texturized protein facility that is scheduled to be completed by the end of the year."

The anticipated closure date for the distillery is estimated as January 2024.

"We are grateful for the unwavering support and contributions of our distillery employees, customers, suppliers, and the people of Atchison. We are committed to ensuring a smooth transition as we wind down operations at the distillery between now and the end of the year, and we look forward to continuing to support the Atchison community.”
David Colo, MGP President and CEO

MGP President and CEO, David Colo, in the release, cites reasons behind the decision to close, including what he calls "the additional supply of grain neutral spirits and industrial alcohol that has entered the market over the past few years has had meanginful and structural impact on the market," explaining that the combination of market factors with "the increase in local corn basis costs during this same time frame has resulted in these product lines no longer being economically viable for the Company."

Colo adds that "the decision to close the Atchison distillery unfortunately represents the best path forward," saying that the company is grateful for it's employees, customers, suppliers, and the people of Atchison," adding that MGP looks "forward to continuing to support the Atchison community."

Ensuring "a smooth transition" as MGP winds down the distillery's operations between now and the end of the year, the release adds that "management will be discussing the planned Atchison distillery closure when the Company releases its financial results during the rest of the year, as more information becomes available."