Frankfort, Kentucky (AP) — The Kentucky Bourbon industry becomes increasingly bullish in the future after reaching new output despite COVID-19 pandemics and trade conflicts in major overseas markets. It shows that it is.
According to the Kentucky Distillery Association, bluegrass bourbon producers set a new production record by filling about 2.5 million barrels in 2020. It was the third consecutive year that a Kentucky distillery filled more than 2 million barrels of bourbon.
And for the first time in modern American whiskey, Kentucky is aging 10 million barrels of bourbon in a distillery warehouse, he said. According to the latest figures, the 4.5 million state has more than 10.3 million barrels of mature bourbon.
“Kentucky’s leading bourbon industry continues to invest in our federation at unprecedented levels despite the global pandemic turmoil, exorbitant taxes and the ongoing trade war,” Distillation said. Eric Gregory, president of the Tokoro Group, said. “This is a truly historic and groundbreaking record.”
Most bourbons are usually 4-8 years old before they hit the market, so large inventories are bet on the future. Bourbon becomes flavorful and golden as it ages. New production volumes are based on inventory submitted to the state for tax purposes as of January 1, 2021.
The Kentucky Distillery is in the midst of a $ 5.1 billion capital investment campaign that includes expansion of production facilities and warehousing to meet the global thirst for Bourbon, Kentucky.
Despite headwinds in domestic and foreign industries, production continues to grow.
Exports of Kentucky Bourbon to the European Union and the United Kingdom (the state’s largest whiskey export market) were hit by ongoing tariff disputes during the Trump era. According to the US Spirit Spirits Council, overall exports of American whiskey decreased by 37% to the EU, resulting in a 53% decrease in exports to the United Kingdom.
American whiskey makers have been in a transatlantic trade dispute since mid-2018, when the EU imposed a 25% tariff on American whiskey and other U.S. products in response to President Donald Trump’s decision to impose tariffs on European steel and aluminum. Is involved in. ..
A group of spirited liquor manufacturers in Kentucky has joined the coalition of 50 American Alcohol Trade Associations and pressured President Joe Biden’s administration to ensure the suspension of American whiskey tariffs.
“Our industry is collateral damage to trade disputes that have nothing to do with Bourbon,” Gregory said.
Meanwhile, spirit liquor makers in Kentucky want to reduce barrel taxes on aged whiskey.
Spirit liquor manufacturers will pay a record $ 33 million in aging barrel tax in 2021, a production cost not faced by spirit liquor manufacturers in other states, and Kentucky producers are competitive. Will suffer the disadvantages, said the Spirit Spirit Manufacturers Association.
Most of the barrel revenue goes to the local school district. According to Gregory, the distillery group’s proposed plan is for the distillery to continue to pay barrel taxes to maintain school income, and the state will reimburse the distillery for the same amount from general revenue sources. He said the distillation industry promised to reinvest the refunded money in its business.
“The bourbon industry has invested more than $ 5 billion in the state to increase production, build innovative tourism centers and create thousands of new jobs,” Gregory said. “But punitive barrel taxes are punishing this growth and undermining the chance of landing a new distillery.
Kentucky General Assembly passed a corporate income tax deduction in 2014 to offset the barrel tax, but the increase in barrels, or tax, far exceeds the deductions available to distillers, Gregory said. Stated. He said some distillers are currently aware of only 30% of their credits.
Kentucky accounts for 95% of the world’s bourbon production, the association said. The $ 8.6 billion bourbon industry has created more than 20,100 jobs and earned more than $ 1 billion annually.
Bullish in the future: Kentucky bourbon production grows | WGN Radio 720
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