Bullish on booze: Kentucky bourbon production grows

FRANKFORT, Ky. — Kentucky’s bourbon industry is signaling that it’s increasingly bullish on its future after reaching new production heights despite the COVID-19 pandemic and trade disputes in key overseas markets.

Bluegrass State bourbon producers filled nearly 2.5 million barrels in 2020, setting a new production record, the Kentucky Distillers’ Association said Monday. It marked the third straight year that Kentucky distilleries filled more than 2 million barrels of bourbon.

And for the first time in the modern era of American whiskey, Kentucky has 10 million barrels of bourbon aging in distillery warehouses, it said. The state of 4.5 million people has more than 10.3 million barrels of maturing bourbon, according to the latest figures.

“Kentucky’s signature bourbon industry continues to invest in our commonwealth at unprecedented levels, despite global pandemic disruptions, exorbitant taxes and ongoing trade wars,” said Eric Gregory, president of the distillers’ group. “This is truly a historic and landmark record.”

Massive inventories are a bet on the future because most bourbons typically age four to eight years before reaching their market. Bourbon gets its flavor and golden brown color during aging. New production numbers are based on inventories reported as of Jan. 1, 2021, submitted to the state for tax purposes.

Kentucky distillers are in the midst of a $5.1 billion capital investment campaign that includes expanding production facilities and warehousing to meet the global thirst for Kentucky bourbon.

Production has continued to rise despite some industry headwinds both at home and abroad.

Kentucky bourbon exports to the European Union and the United Kingdom — the state’s largest whiskey export market — have taken a hit from ongoing Trump-era tariff disputes. Overall American whiskey exports have declined by 37% to the EU and by 53% to the UK as a result,  according to the Distilled Spirits Council of the United States.

American whiskey makers have been caught up in a trans-Atlantic trade dispute since mid-2018, when the EU imposed a 25% tariff on American whiskey and other U.S. products in response to then President Donald Trump’s decision to slap tariffs on European steel and aluminum.

The Kentucky distillers’ group has joined a coalition of 50 U.S. alcohol-related trade associations in pressing President Biden’s administration to secure the suspension of tariffs on American whiskey.

“Our industry is collateral damage in trade disputes that have nothing to do with bourbon,” Gregory said.

from Boston Herald https://ift.tt/3uJQ5T9