Bullish Looking Forward: Kentucky Bourbon Production Rises | WGN 720 radio
Frankfort, Kentucky (AP) – The Kentucky Bourbon industry is becoming increasingly bullish going forward after reaching new production despite COVID-19 pandemics and trade disputes in major overseas markets. This shows that it does.
According to the Kentucky Distillery Association, bluegrass bourbon producers set a new production record filling about 2.5 million barrels in 2020. This was the third year in a row that a Kentucky distillery has filled over 2 million barrels. bourbon.
And for the first time in modern American whiskey, Kentucky ages 10 million barrels of bourbon in a distillery warehouse, he said. According to the latest figures, the state of 4.5 million people has more than 10.3 million barrels of mature bourbon.
“Kentucky’s premier bourbon industry continues to invest in our federation at unprecedented levels despite global pandemic unrest, sky-high taxes and the ongoing trade war,” said Distillation. Eric Gregory, president of the Tokoro group, said. “This is a truly historic and revolutionary record.”
Most bourbons are typically 4-8 years old before they hit the market, so large stocks are bet on the future. Bourbon becomes tasty and golden as it ages. The new production volumes are based on the inventory submitted to the State for tax purposes as of January 1, 2021.
The Kentucky Distillery is in the midst of a $ 5.1 billion capital investment campaign that includes expanding production and warehousing facilities to meet the global thirst for Bourbon, Kentucky.
Despite the headwinds in domestic and foreign industries, production continues to grow.
Kentucky Bourbon exports to the European Union and the United Kingdom (the state’s largest whiskey export market) have been affected by ongoing tariff disputes during the Trump era. According to the US Spirit Spirits Council, overall US whiskey exports fell 37% to the EU, leading to a 53% drop in exports to the UK.
American whiskey makers have been in a transatlantic trade dispute since mid-2018, when the EU imposed a 25% tariff on American whiskey and other American products in response to President Donald Trump’s decision to ” impose tariffs on European steel and aluminum. Is involved in …
A group of Kentucky spirits makers have joined the coalition of 50 U.S. liquor trade associations and lobbied the administration of President Joe Biden to ensure tariffs on U.S. whiskey are suspended.
“Our industry is collateral damage to trade disputes that have nothing to do with Bourbon,” said Gregory.
Meanwhile, Kentucky spirits makers want to lower barrel taxes on aged whiskey.
Spirits makers will pay a record $ 33 million tax on an aging barrel in 2021, a cost of production that spirits makers in other states don’t face, and Kentucky producers are competitive. Will suffer the drawbacks, said the Spirit Spirit Manufacturers Association.
Most of the revenue per barrel goes to the local school district. According to Gregory, the plan proposed by the distillery group is for the distillery to continue paying taxes on the barrel to maintain school revenues, and the state will reimburse the distillery for the same amount from general revenue sources. He said the distillation industry promised to reinvest the money paid back into his business.
“The bourbon industry has invested more than $ 5 billion in the state to increase production, build innovative tourist centers and create thousands of new jobs,” said Gregory. “But punitive barrel taxes penalize this growth and compromise the chances of landing a new distillery.
The Kentucky General Assembly passed a corporate income tax deduction in 2014 to offset the barrel tax, but the increase in barrels, or the tax, far exceeds the deductions available to distillers, Gregory said. Declared. He said some distillers are currently only aware of 30% of their credits.
Kentucky accounts for 95% of the world’s bourbon production, the association said. The $ 8.6 billion bourbon industry has created over 20,100 jobs and earned over $ 1 billion annually.
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