In recognizing the Commonwealth’s centuries-old distilling industry, its direct ties to agriculture and its monumental economic and tourism impact, Gov. Andy Beshear has proclaimed September as Bourbon Heritage Month in Kentucky.
The Governor on Tuesday presented the formal proclamation to Kentucky Distillers’ Association President Eric Gregory during the Kentucky Bourbon Hall of Fame® induction ceremony in Bardstown, the Bourbon Capital of the World.
The proclamation, available here, highlights the state’s $9 billion Bourbon and distilling industry, how it drives tourism across the Commonwealth and sustains more than 22,500 jobs with an annual payroll topping $1.23 billion.
And, it cites Kentucky Bourbon as a chief part of Kentucky’s agricultural, agritech and agritourism industries, with distillers purchasing more than 13.5 million bushels of corn and other grains every year from local farm families – a number that continues to grow.
Gregory welcomed the proclamation and lauded the industry’s growth and impact.
“With continued growing interest and global demand in our historic and homegrown distilling industry, Kentucky Bourbon provides more vital jobs and revenue streams for our Commonwealth and local communities than ever before,” he said.
“We’re proud and honored to carry forward the rich distilling traditions that have been a defining agricultural and industrial endeavor since before Kentucky was a state, while adding countless tourism dollars to local coffers through our Kentucky Bourbon Trail® experiences.”
The distilling industry is currently in the middle of a $5.2 billion, 10-year building boom with $3.3 billion of announced investment coming across the next four years, including more than $100 million in tourism capital investments.
Bourbon production has skyrocketed more than 435% since the turn of the century. Kentucky now boasts more than 10.3 million barrels of Bourbon aging in warehouses across the Bluegrass, the most in its revered distilling history.
Distillers filled more than 2.4 million barrels in 2020 alone, the third year in a row that production topped the two million mark.
Tourists made more than 1.5 million stops at Kentucky Bourbon Trail® and Kentucky Bourbon Trail Craft Tour® distilleries in 2021, a milestone that continues to grow and rebound from COVID and subsequent closures in 2020.
Still, the industry faces a number of challenges – both at home and around the country.
As the number of distilleries in other U.S. states continues to grow – now more than 2,200 across 49 states – Kentucky is at risk of losing its historic industry dominance. This year alone, Kentucky fell from 11th to 12th in the number of licensed distilleries.
Almost all of the states ahead of Kentucky have a significantly lower tax burden on spirits. In Kentucky, about 60% of every bottle of spirits goes towards taxes and fees. Kentucky also is only one of two states with a wholesale tax in addition to excise and sales taxes.
Bourbon is the highest taxed industry in Kentucky, paying $285 million in local and state taxes annually, as well as $1.8 billion in federal alcohol taxes – more federal taxes than any other state in the nation.
The Bluegrass State continues to be the only place in the world that unfairly taxes aging barrels of spirits. This discriminatory tax – the subject of a current legislative task force – punishes growth and pushes startup distilleries to competitor states.
“Other states have made it blatantly clear – they want what Kentucky has in distillery jobs, tourism and investment,” Gregory said. “If Kentucky is going to maintain its distilling dominance, policymakers must reform these excessive alcohol taxes to remove barriers to entry and incentivize more growth.”
In delivering the proclamation to the KDA at this week’s Kentucky Bourbon Hall of Fame event, Gov. Beshear also thanked the association and the Bourbon community for stepping up in times of need.
The KDA and its partners raised nearly $5 million in separate “Kentucky Bourbon Benefit” auctions of rare bottles and private barrel selections for relief efforts after the catastrophic Western Kentucky tornadoes and Eastern Kentucky floods.
Both auctions were the largest single donations to the Team Kentucky relief funds, the Governor said.
“As a signature industry, it’s both incumbent and important that we give back to our fellow Kentuckians in times of great tragedy and need,” Gregory said. “We’re grateful for the Governor’s ongoing support for Bourbon, the backing of the state and its communities, and the fervent interest from enthusiasts and tourists around the world.”