Peoria Station

Atchison, Kansas-based MGP Ingredients, Inc. (MGPI) recently announced an agreement with Lawrenceburg Distillers Indiana (LDI) to purchase a grain distillery in Lawrenceburg, Indiana for $15 million. The original plant, since expanded to 78 acres, dates back to 1847. It was operated by Joseph E. Seagram from 1933 to 2001 when it was acquired by Pernod Ricard, Inc. The present owner purchased the plant in 2007.

The reason for the transaction is stated in MGPI’s October 21 press release.

The acquisition would add significant new production capacity to MGPI’s food grade alcohol area and enables the company to begin producing premium bourbon and corn and rye whiskeys, while also increasing its gin and grain neutral spirits output.

There is, of course, a local connection. MGPI is half-owner of a former bourbon and whiskey distillery in Pekin, Illinois. Formed in November 2009, Illinois Corn Processing LLC is a joint venture with Houston, Texas-based SEACOR Energy Holdings to produce grain alcohol for beverage, fuel-grade and industrial markets.

What makes this interesting is that with MGPI adding bourbon and corn and rye whiskey to its product line, there is always a possibility that production of those liquors won’t be limited to the Lawrenceburg, Indiana facility. Depending on demand (which is rising due to growing markets in the “developing countries”), Pekin could one day start producing similar products (though not likely in the near future). It is, after all, the former home of American Distilling Company bourbon and whiskey.

If nothing else, the Pekin plant could supply alcohol (shipped in bulk by rail) to the Indiana plant following a summer maintenance shutdown. In the past, at least, grain alcohol was used by Seagram to “prime and sterilize” its’ systems before re-starting distilling operations. Maybe 10 or so tank car loads each time. Not much, but something.

The Lawrenceburg distillery is served by the Central Railroad of Indiana RR (CIND). Alcohol shipped from Pekin would likely move NS-(Cincinnati)-CIND.

- David P. Jordan