The Bourbon State: Challenges Mount Amid Report Manufacturing & Landmark Barrel Inventories
Bourbon Business Breaks Barrel Information As It Fights Headwinds That May Disrupt Trajectory
FRANKFORT, KY.— The looming return of retaliatory tariffs on American Whiskey is threatening the unprecedented progress of the Commonwealth’s signature distilling business, which is now ageing a file 14.3 million barrels of Bourbon, the Kentucky Distillers’ Affiliation introduced at this time.
Business leaders are sounding the alarm globally that the specter of returning retaliatory tariffs on spirits – which have swept Kentucky Bourbon into commerce disputes unrelated to whiskey – will disrupt progress, value American jobs, jeopardize funding, and harm native economies throughout the Commonwealth.
The European Union is ready to reinstate tariffs on exports of American spirits at a crippling 50% charge in March if nothing is completed. Retaliatory tariffs from the E.U. and different nations have value Kentucky Bourbon a half-billion {dollars} in exports since 2018.
“Bourbon continues to drive Kentucky’s financial system as our homegrown business is producing extra jobs, extra payroll, extra tax income, extra vacationers and extra distilleries in additional counties than ever earlier than,” stated Eric Gregory, President of the Kentucky Distillers’ Affiliation.
“However we’re up in opposition to a triple risk of back-breaking tariffs, snowballing taxes and shifts in shopper developments which have slowed gross sales. If tariffs focusing on American Whiskey are levied, distillery employees, farmers, truckers, coopers, hospitality workers and whole industries that rely on Bourbon will undergo.”
Gregory stated the KDA understands that commerce is an advanced difficulty and tariffs are an efficient device in some circumstances. “Nonetheless, as proud American producers, we’re involved in regards to the potential retaliation that would influence our merchandise,” he stated.
“Because the Worldwide Voice of Bourbon, it’s the KDA’s job to ensure decision-makers throughout the globe perceive the far-reaching influence of the Bourbon financial system and the way American jobs could be misplaced if we proceed to get dragged into unrelated commerce wars.”
The brand new numbers launched are based mostly on inventories reported as of Jan. 1, 2024. Submitted to the Kentucky Division of Income for tax functions, the numbers symbolize all distilling corporations in Kentucky, the overwhelming majority of that are KDA member distilleries.
Because the barrel stock has skyrocketed, so have the taxes on these ageing barrels – greater than doubling within the final 5 years alone. Since 2009, taxes on ageing spirits have soared greater than 450% and proceed to escalate at an unsustainable charge.
To counteract the mounting tax difficulty that places distillers at a aggressive drawback, legislators handed a regulation final yr that can part out the barrel tax over 20 years, whereas defending funds for colleges, fireplace departments and EMS districts, and giving native governments time to plan and diversify their tax bases.
“With an eye fixed on constructing a powerful Kentucky for generations to come back, we’re grateful that the pro-growth Kentucky Basic Meeting handed Home Invoice 5 to place our signature Bourbon business on a stage enjoying discipline with all different states and nations that don’t levy such a discriminatory payment,” stated Ashli Watts, President of the Kentucky Chamber of Commerce.
Newly-elected KDA Board Chair Ken Lewis stated the business must rigorously navigate tariffs, taxes and different challenges within the coming years to make sure progress is sustainable for all distilleries, each massive and small.
“We’re desirous to proceed telling the story of Kentucky Bourbon and discover options with governments around the globe that can shield jobs, investments and livelihoods again right here at residence,” stated Lewis, founding father of New Riff Distilling and a current inductee into the Kentucky Bourbon Corridor of Fame®.
“World commerce has helped spirits of every kind attain new markets, and whereas worldwide Bourbon curiosity has grown tremendously, it’s not the one spirit individuals are turning to,” he stated. “As governments work by way of disputes, the Bourbon business needs to do all it could actually to maintain spirits out of the road of fireplace.”
Gregory stated inflation and altering shopper developments even have implications for the longer term. “It’s no secret that our business is experiencing a slowdown in gross sales and nonetheless working to get well from the pandemic and the final spherical of tariffs. We’re clawing again, however all these challenges are actual and include success.
“Kentucky Bourbon has gone international, extra barrels are ageing than ever earlier than, and distillers have massive plans for the longer term,” Gregory stated. “The one factor we all know is that at each flip in historical past, good issues comply with when Kentucky distillers are unburdened and allowed to concentrate on making nice whiskey.”
“We’re up in opposition to a triple risk of back-breaking tariffs, snowballing taxes and shifts in shopper developments which have slowed gross sales. If tariffs focusing on American Whiskey are levied, distillery employees, farmers, truckers, coopers, hospitality workers and whole industries that rely on Bourbon will undergo.”
— Eric Gregory, KDA President
Based in 1880, the Kentucky Distillers’ Affiliation is the Worldwide Voice of Bourbon™.
Concerning the Kentucky Distillers’ Affiliation:
Based in 1880, the Kentucky Distillers’ Affiliation is the legendary voice for Kentucky’s signature Bourbon and distilled spirits business. Its numerous and rising membership produces the overwhelming majority of the world’s Bourbon, from historic, international manufacturers to rising micro distilleries which are fostering the following technology of the Commonwealth’s landmark financial engine and its thriving, timeless craft. Member advantages embody media relations, worldwide commerce growth, non-public sampling occasions, technical help, financial growth help, networking, authorized protection, advertising and marketing methods, governmental and regulatory advocacy and progressive tourism experiences by way of the KDA’s world-famous Kentucky Bourbon Path® and Kentucky Bourbon Path Craft Tour® adventures. A 501(c)(6) nonprofit group, the KDA maintains an open membership coverage, champions a powerful dedication to the accountable and average consumption of spirits, and fights to curb underage consuming and drunk driving. Be taught extra at www.kybourbon.com and www.kybourbontrail.com.
KENTUCKY BOURBON TRAIL®, KENTUCKY BOURBON TRAIL CRAFT TOUR®, KENTUCKY BOURBON AFFAIR™, KBT®, BOURBON TRAIL™ and KENTUCKY BOURBON HALL OF FAME® are logos/service marks owned by the Kentucky Distillers’ Affiliation.
