A sober look at alcohol
Main Kentucky distillery to go offline as US whiskey loses ground overseas
Suntory Global Spirits plans to suspend production for all of 2026 at the Kentucky distillery that makes its flagship Jim Beam bourbon whiskey amid slowing exports and growing inventories.
The decision, disclosed by the Suntory Holdings unit on Monday, comes as whiskey exports have slowed following U.S. President Donald Trump's "reciprocal" tariffs introduced this year against many trade partners worldwide.
The move affects the U.S. subsidiary's main distillery in Clermont in the state of Kentucky, which has long handled Jim Beam production. The Fred B. Noe Distillery for craft whiskey, located on the same site, and the Booker Noe Distillery in the Kentucky community of Boston will continue operating.
Suntory acquired U.S. spirits giant Beam, the owner of Jim Beam, in 2014 for $16 billion. The Japanese beverages company positioned the American peer as a core part of its global strategy and the expansion of its overseas sales network. In 2024, the U.S. unit changed its name to Suntory Global Spirits.
U.S.-made whiskey faces strong headwinds. Bourbon, a significant American export, was subjected to retaliatory tariffs in other countries following the Trump administration's levies. That has driven up prices in overseas markets, making U.S. bourbon less competitive against whiskeys from other nations.
Whiskey inventories across Kentucky have hit a record high of 16.1 million barrels, according to data released by the Kentucky Distillers' Association in October, an increase attributed to sluggish exports. Because these inventories are stored in aging barrels, distillers face a maturation tax totaling $75 million statewide, prompting them to adjust production.
Suntory Global Spirits employs about 1,000 people in Kentucky. Parent company Suntory is in discussions with labor unions regarding employee working conditions during the production halt.
After acquiring Beam, Suntory strengthened its brand strategy by opening the distillery to the public and promoting it as a tourist destination. The company plans to continue public tours during the production suspension. A representative of the company said it would use the time to make improvements to facilities.
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