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Pour one out for Jim Beam.
The maker of one of America’s most iconic bourbon whiskeys is halting production at its flagship Kentucky distillery for all of 2026, amid ongoing challenges and tensions facing the U.S. liquor industry – part of the fallout from Trump’s trade war.
In a statement provided to CBC News on Monday, the James B. Beam Distilling Co. confirmed that “we plan to suspend distilling at our main distillery on the James B. Beam Campus for 2026 while we take advantage of the opportunity to invest in site improvements.”
“We are still evaluating production levels to best meet consumer demand and recently met with our team to discuss our volumes for 2026,” the statement said.
The company said it would continue to distill in its smaller FBN Artisanal Distillerywhich makes experimental brands, and at its Booker Noe distillery in Boston, Ky. The company will also bottle and warehouse inventory 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.
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The company did not provide a reason for the one-year pause in distillation activities at that facility. But the move coincides with a record level of bourbon currently aging in barrels.
In October, the Kentucky Distillers Association warned that Kentucky had 16.1 million barrels of bourbon aging in its warehouses, and added that distillers were left with a “crushing” bill of US$75 million in taxes on aging barrels — a property tax on the value of barrels of aged spirits.
Among other reasons, the trade association noted that “continuing uncertainty regarding tariffs” has “reduced exports“.
85% drop in spirits exported from the United States to Canada
Whiskey makers face back-and-forth over tariffs in Europe and in Canada.
In February, the provinces made millions of dollars American wines and spirits from store shelves in response to U.S. President Donald Trump’s decision to impose a 25 per cent tariff on Canadian products.
Overall U.S. spirits exports fell 9 percent during the same period. second quarter 2025 compared to at the same time last year, according to the Distilled Spirits Council of the United States. The most spectacular decrease came in US spirits exports to Canada, which fell 85 percent in the second quarter, falling below US$10 million.
“International consumers appear increasingly willing to replace U.S. spirits with domestic alternatives or with imports from other countries,” the Spirits Council said in its October report.
The report adds that the international market is particularly critical for U.S. whiskey producers, who are facing stagnant domestic sales and record inventory levels.
Saskatchewan and Alberta, which both privatized their alcohol retail systems, initially withdrew their U.S. products when other provinces did, but resumed sales in June.
Since the end of October, many provinces have made part of their American inventory available again, particularly products that would soon expire. In some cases, net profits are donated to local charities.
Most bourbon comes from Kentucky
Kentucky produces 95% of the world’s bourbon and more than half of Kentucky’s whiskey is Jim Beam, according to United Food and Commercial Workers (UFCW) Local 111D, the union that represents workers at Kentucky’s Jim Beam distilleries.
In a statement provided to CBC News, a union spokesperson said employees in the distillery department are being reassigned within the company and there are no layoffs at this time.
“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 that the industry generates more than 23,000 jobs and US$2.2 billion for the state. In addition to business challenges, the industry is facing a decline in consumer spending and decreasing demand for a product that needs several years of aging before being ready.
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