A new report estimates that the Bourbon industry has a $9 billion economic impact on Kentucky’s economy each year. According to the biennial report commissioned… Read More
A new report estimates that the Bourbon industry has a $9 billion economic impact on Kentucky’s economy each year. According to the biennial report commissioned by the Kentucky Distillers Association, that impact includes more than 23,000 jobs with annual salaries and benefits totaling $2.2 billion.
“Kentucky Bourbon is a $9 billion economic and tourism powerhouse for our Commonwealth, now generating more jobs, more payroll, more tax revenue, more tourists and more distilleries in more Kentucky counties than ever before, KDA President Eric Gregory said at a briefing at the state Capitol in Frankfort.
The state’s 100 licensed distilleries purchased 21 million bushels of grain from Kentucky farmers during 2023, accounting for 70 percent of their grain needs and providing what Agriculture Commissioner Jonathan Shell called a boon for farm families across the Commonwealth. “It’s areas of this state that have a hard time with economic development, but this is an area in which they’re able to help them with their local economies. With the distillers, the farmers, the people who work these fields and the people who distill these spirits, this is something that helps grow Kentucky a tremendous amount,” he said.
The industry accounted for $358 million in state and local taxes during 2023, up 180% from when the KDA’s first economic impact study was conducted in 2009. The industry also accounted for $1.9 billion in federal excise taxes – nearly 25 percent of the federal government’s entire revenue from alcohol excise taxes. In addition, Bourbon distilleries generated 2.5 million visitor experiences during 2023, leading to further economic growth in the hospitality sector.
The study was conducted again this year by University of Louisville professor emeritus of economics Paul Coomes and economic consultant Barry Kornstein. With Coomes retiring, the biennial studies will now be conducted by the University of Kentucky’s James B. Beam Institute.
There’s a lot of data behind the whiskies we enjoy, and analyzing that data can give us some insights into the health of the whisky… Read More
There’s a lot of data behind the whiskies we enjoy, and analyzing that data can give us some insights into the health of the whisky industry. Martin Purvis and Duncan McFadzean examine whisky data for their Commercial Spirits Intelligence newsletter, and concluded that last week’s Scotch Whisky export numbers aren’t as bad as they might appear on face value. We’ll talk with Martin Purvis about the analysis on this week’s WhiskyCast In-Depth. In the news, we have details on this year’s crop of annual releases from Four Roses, Heaven Hill, and Old Forester, along with the rest of the week’s new releases. We’ll also have our Community segment and explain in Behind the Label why you can’t get a Kentucky Bourbon Trail passport stamped at one of the Commonwealth’s most popular distilleries.
September 27, 2022 – Kentucky distillers set a new production record in 2021, according to state revenue department data released today by the Kentucky Distillers Association. Distillers filled more than 2 million barrels for the fourth consecutive year, and had a total of nearly 12 million barrels of Bourbon and other spirits aging in the state’s rickhouses as of January 1, when they’re required to file an inventory report with the state. The inventory generated a total of $40 million in “barrel taxes,” the property tax leveled on every barrel of maturing spirits in a distiller’s inventory. That money goes Read More »
September 27, 2022 – Kentucky distillers set a new production record in 2021, according to state revenue department data released today by the Kentucky Distillers Association. Distillers filled more than 2 million barrels for the fourth consecutive year, and had a total of nearly 12 million barrels of Bourbon and other spirits aging in the state’s rickhouses as of January 1, when they’re required to file an inventory report with the state.
The inventory generated a total of $40 million in “barrel taxes,” the property tax leveled on every barrel of maturing spirits in a distiller’s inventory. That money goes to local governments to fund public education and other services, but distillers have long claimed it to be “discriminatory” because Kentucky is the only place that has a barrel tax.
“We’re thrilled that our homegrown and historic industry continues to flourish, but these numbers could have been much higher if Kentucky didn’t have a major barrier to entry for new distilleries in the form of this barrel tax,” KDA President Eric Gregory said in a news release. The KDA has successfully lobbied in previous years to get legislation passed allowing distillers to take a credit for their barrel tax payments against their state income tax bills each year, but a move by state lawmakers several years ago to reduce corporate income taxes now means some larger distillers have more credits than they pay in income taxes in some years, forcing them to carry over excess credits to future years. The total number of outstanding tax credits could exceed $100 million, according to Gregory.
“We’ve got to find a solution to this, because the numbers are just soaring and the state can’t afford that, the locals can’t afford for it to just go away off the books, and we can’t afford to continue this because it’s such a disincentive to locate here and a barrier to entry for distillers,” Gregory said in a telephone interview.
The KDA has proposed making the credits either refundable or transferrable, which would allow a distiller to pass along excess credits to pay a contractor for construction work as an example.
The barrel tax is politically sensitive because it is earmarked specifically for local and county governments, which build their annual budgets expecting a certain level of revenue from the property tax. Distillers have been walking a tightrope trying to get tax relief at the state level while not hurting the local communities in which they operate.
The legislature has a task force looking at the issue and taking testimony from local governments as well as the industry, and will be spending the time between now and the start of the next legislative session in January trying to craft a solution.
Editor’s note: This story was updated with additional information following an interview with Eric Gregory.
The massive tornado that ripped through Western Kentucky overnight on December 10, 2021 caused tremendous losses. But, as Kentuckians have shown throughout history, we’re resilient, and as distillers and bourbon fans have also shown, we answer the call. In fact, the Kentucky Distillers’ Association…
The massive tornado that ripped through Western Kentucky overnight on December 10, 2021 caused tremendous losses. But, as Kentuckians have shown throughout history, we’re resilient, and as distillers and bourbon fans have also shown, we answer the call. In fact, the Kentucky Distillers’ Association and the Bourbon Crusaders set a new bar for fundraising.
The morning after the storms, KDA president Eric Gregory was on the phone with me, Fred Minnick, the Bourbon Crusaders, and all Kentucky distillers (not just KDA member distilleries) to begin planning how we could help with relief efforts.
Within only a few days, the KDA had secured incredible once-in-a-lifetime donations from Kentucky’s signature distilleries, the Bourbon Crusaders had lined up donations of epic “unicorn” bottles from members and friends, and Fred Minnick mobilized his resources to present what would become the largest charitable bourbon auction ever—The Kentucky Bourbon Benefit.
Over a four-day period, the Kentucky Bourbon Benefit listed about 100 new auction items per day, ending with 429 items. Bidding began immediately, with over five thousand total bidders, ending with a live auction of the top items on December 21 at Westport Whiskey & Wine in Louisville. By the following morning as final bids were tallied and donations were still coming in, the Kentucky Bourbon Benefit had raised about $3.5 million for tornado relief efforts, which will all go to Governor Andy Beshear’s Team Western Kentucky Tornado Relief Fund.
The top two items were exclusive barrel experiences donated by Willett and Four Roses. The Willett barrel experience—a 19-year-old barrel selection—sold for $401,001, which set the individual barrel record ever, and Willett doubled it the next morning when the second-place bidder agreed to pay the winning bid price. Similarly, the Four Roses experience, which offered a barrel between 17 and 24 years, sold for an astounding $278,000, and Four Roses doubled its donation too, so the second-place bidder increased his bid to net $556,000 for the Four Roses barrels.
Both Four Roses and Willett donated other rare bottles and barrels to the Kentucky Bourbon Benefit, so that just from the generosity of these two distilleries, Western Kentuckians will receive over $1.7 million.
Other distillery partners like Brown-Forman/Woodford Reserve, Heaven Hill, Maker’s Mark, Angel’s Envy, New Riff, Michter’s, Rabbit Hole, and Castle & Key, among others, all made remarkable donations that raked in never-before-seen bidding. And individual donors like Chris Morris, of Brown-Forman, and Larry Kass, retired from Heaven Hill, donated bottles that are impossible to find anywhere. Only one major distillery did its own auction, but individuals affiliated with that distillery made generous donations on their own.
The Kentucky Bourbon Benefit also included 14 bottles from Carr’s Steakhouse in Mayfield, Kentucky, which was devastated by the storm. While Carr’s was demolished, 14 bottles of bourbon survived and were added to the auction, most with matching funds from KDA-member distilleries, Independent Stave Company, Vendome Copper & Brass Works, and the Kentucky Travel Industry Association.
KDA President Eric Gregory said, “The outpouring of support, care and love for Western Kentuckians is truly unparalleled in the history of Bourbon. We are forever grateful for the generosity of distillers, donors and bidders.” Bourbon Crusaders President RJ Sargent added, “The response was tremendous, far beyond our wildest hopes. Our members pulled out treasures from their collections and the community responded enthusiastically.”
Bourbon enthusiasts across the country proved again that it’s not just about the bourbon.
**You can still donate to the official Kentucky relief site here: https://secure.kentucky.gov/formservices/Finance/WKYRelief or to the Bourbon Crusaders, a 501(c)(3) charitable organization. If you donate to the official fund, please designate “Kentucky Bourbon Benefit” in the “Fundraising Event” field.
In the coda of my last post, I touched on the tragedy of last week’s tornados and the immense destruction they caused in Western Kentucky. The devastation weighed heavily on my mind, as I’m certain it did for you. But out of the darkness, there was lig…
In the coda of my last post, I touched on the tragedy of last week’s tornados and the immense destruction they caused in Western Kentucky. The devastation weighed heavily on my mind, as I’m certain it did for you. But out of the darkness, there was light – and hope. Countless individuals, organizations, corporations, and […]
The Kentucky Distillers’ Association Passport program for the Kentucky Bourbon Trail® just got a MAJOR upgrade. A new Field Guide is packed full of valuable information about Kentucky’s treasured bourbon distilleries, travel distances from convenient home bases, and it will take you on a…
The Kentucky Distillers’ Association Passport program for the Kentucky Bourbon Trail® just got a MAJOR upgrade. A new Field Guide is packed full of valuable information about Kentucky’s treasured bourbon distilleries, travel distances from convenient home bases, and it will take you on a memorable adventure through Kentuck’s beautiful countryside.
This new Field Guide does a better job at helping you navigate Kentucky’s distilleries than pricey travel books. And now, Passport stamps unlock bottles and other incredible rewards!
