Bourbon maker Jim Beam halts Kentucky production amid ongoing trade tensions

pelt 1 come out for Jim electron beam.

The shaper of one of the U.S.'s most iconic bourbon whiskies is halting production at its flagship distillery in Kentucky for all of 2026 amid the ongoing challenges and strain faced by the U.S. Liquor industry — part of the fallout from Trump's trade war.

"We are always assessing production levels to best meet consumer demand and recently met with our team to discuss our volumes for 2026," the statement says.

The company said it will continue to distill at its smaller FBN craft distillery, which makes experimental brands, and at its Booker Noe distillery in Boston, Ky. The company will also still bottle and warehouse stock at its flagship location in Clermont, Ky.

The main Clermont distillery produces about a third of the company’s annual output, according to the New York Times. Local Kentucky media report that the Clermont campus also produces Knob Creek, Baker’s, Booker’s and Basil Hayden’s.

Bourbon whisky among top-selling U.S. Alcohol back on N.S. Shelves | Hanomansing Tonight

The company didn't provide a reason for the one-year pause of distilling activities at the one facility. But the move coincides with an all-time high of bourbon currently aging in barrels.

In October, the Kentucky Distillers' Association warned that Kentucky had 16.1 million aging barrels of bourbon in its warehouses, and added that distillers were stuck with a "crushing" $75 million US tab in aging barrel taxes — a property tax on the value of barrels of aging spirits.

Among other reasons, the trade association noted that "continued uncertainty over tariffs" have "slashed exports."

Whisky makers are dealing with back-and-forth arguments over tariffs in Europe and in Canada.

Back in February, provinces pulled millions of dollars' worth of U.S. Wine and spirits from store shelves in response to U.S. President Donald Trump’s decision to impose a 25 per cent tariff on Canadian goods.

Overall exports of American spirits fell nine per cent in the second quarter of 2025 compared to the same period last year, 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 per cent in the second quarter, dropping below $10 million US.

"International consumers appear increasingly inclined to substitute U.S. Spirits with domestic alternatives or imports from other countries," the spirits council said in its October report.

The report added that the international market is especially critical for U.S. Whisky producers, which are facing stagnating domestic sales and record-high inventory levels.

Saskatchewan and Alberta, which both have privatized alcohol retail sales systems, initially pulled their U.S. Product when the other provinces did but resumed selling them in June.

Since the end of October, many provinces have made some of their U.S. Inventory available again, especially products that would be expiring soon. In some cases, the net proceeds are going to local charities. 

Kentucky produces 95 per cent of the world's bourbon, and more than half of the Kentucky whisky is Jim Beam, according to  United Food and Commercial Workers  (UFCW) Local 111D, the union that represents workers at Jim Beam's Kentucky distilleries. 

"The company and union are working to ensure there is minimal impact on workers during this production shutdown," the spokesperson said.

The Kentucky Distillers' Association estimates the industry brings more than 23,000 jobs and $2.2 billion US to the state. In addition to trade woes, the industry is dealing with decreased consumer spending and slumping demand for a product that needs years of aging before it is ready.

What happens when U.S. Whisky finally runs dry in Toronto?

Senior Writer & Editor

---

---