diff --git a/alertobserver/alertobserver.go b/alertobserver/alertobserver.go
index 708942175f..cf05d9210c 100644
--- a/alertobserver/alertobserver.go
+++ b/alertobserver/alertobserver.go
@@ -18,14 +18,15 @@ import (
 )
 
 const (
-	EventAlertReceived          string = "received"
-	EventAlertRejected          string = "rejected"
-	EventAlertAddedToAggrGroup  string = "addedAggrGroup"
-	EventAlertPipelineStart     string = "pipelineStart"
-	EventAlertPipelinePassStage string = "pipelinePassStage"
-	EventAlertMuted             string = "muted"
-	EventAlertSent              string = "sent"
-	EventAlertSendFailed        string = "sendFailed"
+	EventAlertReceived             string = "received"
+	EventAlertRejected             string = "rejected"
+	EventAlertAddedToAggrGroup     string = "addedAggrGroup"
+	EventAlertFailedAddToAggrGroup string = "failedAddAggrGroup"
+	EventAlertPipelineStart        string = "pipelineStart"
+	EventAlertPipelinePassStage    string = "pipelinePassStage"
+	EventAlertMuted                string = "muted"
+	EventAlertSent                 string = "sent"
+	EventAlertSendFailed           string = "sendFailed"
 )
 
 type AlertEventMeta map[string]interface{}
diff --git a/alertobserver/testing.go b/alertobserver/testing.go
index 45e3611fba..66f774fbb7 100644
--- a/alertobserver/testing.go
+++ b/alertobserver/testing.go
@@ -14,6 +14,8 @@
 package alertobserver
 
 import (
+	"sync"
+
 	"github.com/prometheus/alertmanager/types"
 )
 
@@ -21,9 +23,12 @@ type FakeLifeCycleObserver struct {
 	AlertsPerEvent      map[string][]*types.Alert
 	PipelineStageAlerts map[string][]*types.Alert
 	MetaPerEvent        map[string][]AlertEventMeta
+	Mtx                 sync.RWMutex
 }
 
 func (o *FakeLifeCycleObserver) Observe(event string, alerts []*types.Alert, meta AlertEventMeta) {
+	o.Mtx.Lock()
+	defer o.Mtx.Unlock()
 	if event == EventAlertPipelinePassStage {
 		o.PipelineStageAlerts[meta["stageName"].(string)] = append(o.PipelineStageAlerts[meta["stageName"].(string)], alerts...)
 	} else {
diff --git a/dispatch/dispatch.go b/dispatch/dispatch.go
index 4b7dc31ec9..833c70a544 100644
--- a/dispatch/dispatch.go
+++ b/dispatch/dispatch.go
@@ -332,7 +332,11 @@ func (d *Dispatcher) processAlert(alert *types.Alert, route *Route) {
 	// If the group does not exist, create it. But check the limit first.
 	if limit := d.limits.MaxNumberOfAggregationGroups(); limit > 0 && d.aggrGroupsNum >= limit {
 		d.metrics.aggrGroupLimitReached.Inc()
-		level.Error(d.logger).Log("msg", "Too many aggregation groups, cannot create new group for alert", "groups", d.aggrGroupsNum, "limit", limit, "alert", alert.Name())
+		errMsg := "Too many aggregation groups, cannot create new group for alert"
+		level.Error(d.logger).Log("msg", errMsg, "groups", d.aggrGroupsNum, "limit", limit, "alert", alert.Name())
+		if d.alertLCObserver != nil {
+			d.alertLCObserver.Observe(alertobserver.EventAlertFailedAddToAggrGroup, []*types.Alert{alert}, alertobserver.AlertEventMeta{"msg": errMsg})
+		}
 		return
 	}
 
diff --git a/dispatch/dispatch_test.go b/dispatch/dispatch_test.go
index 6a3bfdd166..e026dffb84 100644
--- a/dispatch/dispatch_test.go
+++ b/dispatch/dispatch_test.go
@@ -596,15 +596,15 @@ route:
 	recorder := &recordStage{alerts: make(map[string]map[model.Fingerprint]*types.Alert)}
 	m := NewDispatcherMetrics(true, prometheus.NewRegistry())
 	observer := alertobserver.NewFakeLifeCycleObserver()
-	dispatcher := NewDispatcher(alerts, route, recorder, marker, timeout, nil, logger, m, observer)
+	lim := limits{groups: 1}
+	dispatcher := NewDispatcher(alerts, route, recorder, marker, timeout, lim, logger, m, observer)
 	go dispatcher.Run()
 	defer dispatcher.Stop()
 
 	// Create alerts. the dispatcher will automatically create the groups.
-	inputAlerts := []*types.Alert{
-		newAlert(model.LabelSet{"alertname": "OtherAlert", "cluster": "cc", "service": "dd"}),
-	}
-	err = alerts.Put(inputAlerts...)
+	alert1 := newAlert(model.LabelSet{"alertname": "OtherAlert", "cluster": "cc", "service": "dd"})
+	alert2 := newAlert(model.LabelSet{"alertname": "YetAnotherAlert", "cluster": "cc", "service": "db"})
+	err = alerts.Put(alert1)
 	if err != nil {
 		t.Fatal(err)
 	}
@@ -612,11 +612,24 @@ route:
 	for i := 0; len(recorder.Alerts()) != 1 && i < 10; i++ {
 		time.Sleep(200 * time.Millisecond)
 	}
+	err = alerts.Put(alert2)
+	if err != nil {
+		t.Fatal(err)
+	}
+	// Let alert get processed.
+	for i := 0; testutil.ToFloat64(m.aggrGroupLimitReached) == 0 && i < 10; i++ {
+		time.Sleep(200 * time.Millisecond)
+	}
+	observer.Mtx.RLock()
+	defer observer.Mtx.RUnlock()
 	require.Equal(t, 1, len(recorder.Alerts()))
-	require.Equal(t, inputAlerts[0].Fingerprint(), observer.AlertsPerEvent[alertobserver.EventAlertAddedToAggrGroup][0].Fingerprint())
-	groupFp := getGroupLabels(inputAlerts[0], route).Fingerprint()
+	require.Equal(t, alert1.Fingerprint(), observer.AlertsPerEvent[alertobserver.EventAlertAddedToAggrGroup][0].Fingerprint())
+	groupFp := getGroupLabels(alert1, route).Fingerprint()
 	groupKey := dispatcher.aggrGroupsPerRoute[route][groupFp].GroupKey()
 	require.Equal(t, groupKey, observer.MetaPerEvent[alertobserver.EventAlertAddedToAggrGroup][0]["groupKey"].(string))
+
+	require.Equal(t, 1, len(observer.AlertsPerEvent[alertobserver.EventAlertFailedAddToAggrGroup]))
+	require.Equal(t, alert2.Fingerprint(), observer.AlertsPerEvent[alertobserver.EventAlertFailedAddToAggrGroup][0].Fingerprint())
 }
 
 type recordStage struct {
diff --git a/notify/notify.go b/notify/notify.go
index 30ab453160..43117c47af 100644
--- a/notify/notify.go
+++ b/notify/notify.go
@@ -837,7 +837,7 @@ func (r RetryStage) exec(ctx context.Context, l log.Logger, alerts ...*types.Ale
 							"integration": r.integration.Name(),
 							"stageName":   "RetryStage",
 						}
-						r.alertLCObserver.Observe(alertobserver.EventAlertSendFailed, alerts, m)
+						r.alertLCObserver.Observe(alertobserver.EventAlertSendFailed, sent, m)
 					}
 					return ctx, alerts, errors.Wrapf(err, "%s/%s: notify retry canceled due to unrecoverable error after %d attempts", r.groupName, r.integration.String(), i)
 				}
@@ -860,7 +860,7 @@ func (r RetryStage) exec(ctx context.Context, l log.Logger, alerts ...*types.Ale
 						"integration": r.integration.Name(),
 						"stageName":   "RetryStage",
 					}
-					r.alertLCObserver.Observe(alertobserver.EventAlertSent, alerts, m)
+					r.alertLCObserver.Observe(alertobserver.EventAlertSent, sent, m)
 				}
 				lvl.Log("msg", "Notify success", "attempts", i)
 
@@ -877,7 +877,7 @@ func (r RetryStage) exec(ctx context.Context, l log.Logger, alerts ...*types.Ale
 					"integration": r.integration.Name(),
 					"stageName":   "RetryStage",
 				}
-				r.alertLCObserver.Observe(alertobserver.EventAlertSendFailed, alerts, m)
+				r.alertLCObserver.Observe(alertobserver.EventAlertSendFailed, sent, m)
 			}
 			return ctx, nil, errors.Wrapf(iErr, "%s/%s: notify retry canceled after %d attempts", r.groupName, r.integration.String(), i)
 		}