Whiskey Hit by Tariff War Fallout... Jim Beam to Halt Main Distillery Production for a Year

"Facility improvements and other investments planned during shutdown"
"Rising management costs from inventory buildup cited as the cause"

Bourbon whiskey manufacturer Jim Beam has announced that it will halt operations at its main distillery in Kentucky for the entire next year.

On December 22 (local time), CNN and BBC reported, citing a statement from Jim Beam, that "production at the distillery within the James B. Beam campus in Clermont, Kentucky, will be temporarily suspended starting January 1 next year." The company plans to invest in facility improvements and other upgrades during the shutdown period.

Bourbon whiskey manufacturer Jim Beam will halt operations at its main distillery in Kentucky for the entire next year. Photo to aid understanding of the article. Pixabay.

The BBC reported that "distilled spirits manufacturers in Kentucky are facing uncertainty due to factors such as U.S. President Donald Trump's trade policies." Regarding workforce management during the suspension, the owner, Suntory Global Spirits, and the labor union are currently negotiating. The brand is owned by Japanese beverage giant Suntory Global Spirits, which employs more than 1,000 workers at its Kentucky facilities.

This decision is attributed to the increased management costs resulting from a buildup of inventory. According to the Kentucky Distillers' Association (KDA) in October, the amount of bourbon whiskey stored in warehouses across the state surpassed 16 million barrels, reaching an all-time high.

Kentucky imposes taxes even on bourbon whiskey that is still aging. The association stated, "Distilleries have borne costs amounting to $75 million (110.0775 billion won) this year alone for aging barrels." This represents a 27% increase compared to 2024. The surge in inventory is also attributed to decreased demand caused by the trade war under the Trump administration.

U.S. alcoholic beverage manufacturers have faced retaliatory import tariffs since President Trump announced so-called 'Liberation Day' in April, imposing tariffs on most countries worldwide. The BBC noted, "Trade tensions between the United States and Canada have also affected alcohol sales," adding that "most Canadian provinces launched a boycott of American alcoholic beverages earlier this year."