How much bourbon did Kentucky make last year? And how much are all the barrels worth?
For the fourth year in a row, Kentucky distillers filled more than 2 million bourbon barrels, according to the Kentucky Distillers’ Association.
The trade group said in a press release that in 2021 bourbon makers filled 2.6 million barrels and that there are currently more than 11.4 million barrels of bourbon aging in Kentucky.
The numbers are based on inventories reported by distillers as of Jan. 2, 2022, to the Kentucky Department of Revenue for tax purposes and includes all distilling companies in the state, including those like Sazerac (makers of Buffalo Trace, Pappy Van Winkle, Barton, etc.) who are not members of the KDA.
How much bourbon is in Kentucky?
According to the state, the total inventory, including other spirits, is more than 11.5 million barrels valued for tax purposes at more than $5.2 billion.
The KDA is lobbying lawmakers to reduce or eliminate the tax it pays on the barrels.
According to the KDA, bourbon makers are projected to pay nearly $40 million in barrel taxes for 2022, $7 million more than the $33 million they paid for 2021.
Kentucky bourbon boom and taxes
The amount has grown in recent years as distilleries have been on a building boom, putting up new bourbon warehouses and increasing distilling capacity as demand for American whiskey has grown globally.
The global market for bourbon and other American whiskeys is rebounding after tariffs were been lifted and in 2021, those exports were nearly $1 billion, according to the Distilled Spirits Council of the U.S.
In July, Louisville-based Brown-Forman, the publicly traded company that makes Jack Daniel’s Tennessee Whiskey as well as Woodford Reserve and Old Forester bourbons, reported $4 billion in sales, up double digits last year.
“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,” said Eric Gregory, president of the KDA, said in the press release.
However, no taxes are on paid on spirits in the barrel for the first two years, Gregory confirmed in response to a Herald-Leader inquiry.
A task force chaired by Kentucky Senate President Robert Stivers, R-Manchester, and State House Majority Whip Chad McCoy, R-Bardstown, has been meeting this summer to discuss how barrel taxes could be adjusted again. Distillers say a tax credit that they began receiving in 2015 is only of partial use because they don’t pay enough corporate income taxes to offset the full amount.
The Bourbon Barrel Task Force meets Oct. 21 in Frankfort.
As bourbon expands, push back grows
Although the industry has pressed to have the taxes removed, several counties including Woodford, Bullitt, Nelson, Franklin, Anderson and others say they depend upon the revenue for fire departments, schools and county budgets.
The push to remove the taxes comes as the bourbon industry continues a massive expansion, with more than $5 billion in new distilleries, bottling plants, rickhouses, tourism venues and ancillary growth planned.
But not everyone see this as an unmitigated boon: Residents in at least three Kentucky counties are fighting major distillery projects because they fear whiskey fungus, a black tar-like growth that feeds off evaporating bourbon vapors, will damage their property.
This story was originally published October 11, 2022 at 4:00 PM with the headline "How much bourbon did Kentucky make last year? And how much are all the barrels worth?."
