Cloudy future for bourbon has Jim Beam closing Kentucky distillery for a year

Kentucky bourbon maker Jim Beam is pausing production at its main distillery due to uncertainty over tariffs, and an increased supply of aging barrels.

Bourbon maker Jim Beam is halting production at one of its distilleries in Kentucky for at least a year as the whiskey industry navigates tariffs from the Trump administration and slumping demand for a product that needs years of aging before it is ready.

Jim Beam said the decision to pause bourbon making at its Clermont location in 2026 will give the company time to invest in improvements at the distillery. The bottling and warehouse at the site will remain open, along with the James B. Beam Distilling Co. visitors center and restaurant.

The company’s larger distillery in Boston, Kentucky, will continue to operate, the company said.

“We are always assessing production levels to best meet consumer demand,” the company said in a statement that added they were talking with the distillery’s union to determine whether there will be layoffs or other reductions.

Bourbon makers have to gamble well into the future. Jim Beam’s flagship bourbon requires at least four years of aging in barrels before being bottled.

Whiskey makers are dealing with back-and-forth arguments over tariffs in Europe and in Canada, where a boycott started after the Trump administration suggested annexing the country into the U.S.

Overall exports of American spirits fell 9% in the second quarter of 2025 compared to a year ago, according to the Distilled Spirits Council of the United States. The most dramatic decrease came in U.S. spirits exports to Canada, which fell 85% in the April-through-June quarter

Bourbon production has grown significantly in recent years. As of January, there were about 16 million barrels of bourbon aging in Kentucky warehouses — more than triple the amount held 15 years ago, according to the Kentucky Distillers’ Association.

But sales figures and polling show Americans are drinking less than they have in decades.

About 95 per cent of all bourbon made in the U.S. comes from Kentucky. The trade group estimated the industry brings more than 23,000 jobs and US$2.2 billion to the state.

Jeffrey Collins, The Associated Press