Kentucky distillers are maturing a high of 16.1m barrels of bourbon whiskey, the most since Prohibition, according to figures released this week.
The total volume of spirits in storage in Kentucky stands at 17.1m barrels across the state’s 127 licensed distilleries, operated by 103 companies, according to data based on inventories reported as of 1 January by the Kentucky Distillers’ Association (KDA). However, the record comes with growing financial pressure: Kentucky remains the only place in the world to tax ageing barrels, with producers facing a US$75m bill this year, up 27% from 2024 and 163% over the past five years, as the total assessed value of maturing liquid reached $10bn.
KDA president Eric Gregory described the situation as a “mixed blessing,” citing both strong industry growth and intensifying challenges. “Continued uncertainty over tariffs, competition for leisure dollars, snowballing taxes and generational shifts in drinking have slowed sales and slashed exports,” he said.
From 2026, however, Kentucky’s barrel tax will begin a 20-year phase-out, following legislation passed in 2023, with a 4% reduction in the first year. Gregory said the move provides “some relief” but called for broader action to protect the state’s signature industry, including “a speedy return to reciprocal, tariff-free trade.”
The trade association’s warning follows last week’s mid-year report from the Distilled Spirits Council of the US (Discus), which showed a 9% year-on-year decline in US spirits exports for the three months to the end of June, including an 85% drop to Canada. Discus painted a particularly bleak outlook for American whiskey, which the organisation warned is facing “stagnating domestic sales and record-high inventory levels”.
