Jim Beam, the brand that symbolizes Kentucky bourbon whiskey, will halt operations at its main Kentucky distillery for the whole of next year. The move is a last-ditch measure as the global whiskey market faces a double whammy of record-high inventories and slowing demand.
Experts said the market environment has deteriorated so sharply that the No. 1 bourbon whiskey brand is closing its flagship plant. On top of that, this year's tariff risk under the Trump administration's trade policy is piling on, sending sweeping restructuring pressure across the U.S. whiskey industry.
According to Whiskey Advocate and the Louisville Business Journal on the 22nd local time, Suntory Global Spirits, which owns the Jim Beam brand, will suspend operations at the James B. Beam Distilling Co. in Clermont, Kentucky, for one year starting Jan. 1 next year. Jim Beam said the move is "to optimize production levels in line with changes in consumer demand."
It is extremely rare for a giant brand like Jim Beam to leave a core production base idle for a full year. Bourbon whiskey is a signature American distilled spirit made primarily from corn. Jim Beam holds the world's No. 1 market share in this category. Such a symbolic brand halting distillation for a year suggests the whiskey boom is effectively entering its final phase.
Right now, the U.S. bourbon industry is grappling with an unprecedented glut of inventory spirit. Data released by the Kentucky Distillers' Association (KDA) show that as of January this year, Kentucky had 16.1 million barrels of bourbon aging in warehouses, a record high. Given Kentucky's population of about 4.5 million, that means more than 3.5 barrels of whiskey per resident. Compared with 20 years ago, before bourbon demand exploded, inventories have more than tripled.
Kentucky imposes a unique ad valorem tax every year on aging whiskey barrels stored in distillery warehouses. Producers must pay tax annually as the spirit matures in oak. The larger the inventory, the more the tax burden on manufacturers rises exponentially. According to the KDA, the industry's aging barrel tax due this year in Kentucky amounts to about $75 million (about 11 billion won). Over the past five years, the aging tax has surged 163%, pressuring manufacturers' operations.
In contrast to ballooning inventories, market demand has cooled quickly. Alcohol consumption among U.S. adults has dropped sharply in recent years. According to the research firm Gallup, the adult drinking rate fell from 62% in 2023 to 58% in 2024. This year it dropped to 54%, the lowest reading on record. In particular, among middle-aged adults 35 to 54, who had driven the whiskey market, the drinking rate fell sharply from 70% to 56%. Among young adults 18 to 34 entering the market, the drinking rate also declined markedly from 59% in 2023 to 50% in 2025.
As a result, U.S. whiskey sales turned down in 2023 for the first time in about 20 years. Last year, sales fell another 2.7%, marking a second straight year of contraction. Whiskey Advocate said, "The bourbon boom that lasted for the past 20 years has effectively ended," and added, "The industry has entered a painful adjustment period to resolve a massive supply glut."
External conditions are bleak as well. The Trump administration's America-first trade policy poses a major threat to the U.S. whiskey industry, which relies heavily on exports. During the Trump administration's first term, when it waged a tariff war with the European Union (EU), U.S. whiskey was hit with a 25% retaliatory tariff and export value was cut in half almost overnight.
This year, Canada, once the largest importer of U.S. whiskey, effectively stopped importing bourbon after trade tensions reignited in March. The industry estimates U.S. whiskey exports to Canada fell 60% from a year earlier. In Northeast Asia, markets such as Korea and China that surged after the pandemic also cooled as domestic economies slumped. Even overseas channels—the only outlet capable of absorbing the marooned inventories in the United States—have been blocked.
Emergency measures for survival are not unique to Jim Beam. Other U.S. whiskey giants moved into emergency mode ahead of Jim Beam. Brown-Forman, the maker of "Jack Daniel's," decided early this year to shut its cooperage in Louisville, Kentucky. It also laid off about 640 employees. Brown-Forman plans to save up to $80 million annually through the closure.
Diageo, the world's largest alcohol company and owner of the "Bulleit" brand, is also suffering from deteriorating profitability due to weak whiskey sales. Diageo decided early this year to temporarily halt operations at its Lebanon, Kentucky, distillery. It fully closed its Stitzel-Weller facilities, another distillery in Kentucky.
Experts warned that the U.S. whiskey industry has entered a prolonged downturn. It will likely take considerable time to resolve the three factors of slowing U.S. consumption, excess inventories, and variables such as tariffs and exports.
In a report, investment bank TD Cowen said, "Whiskey consumers are splitting into two groups—those seeking more expensive premium products and those cutting back altogether," and predicted, "As consumers close their wallets or look for cheaper substitutes, mass-market whiskey brands are likely to remain weak."
Whiskey Advocate likewise said, "The U.S. whiskey industry is facing strong headwinds after an unprecedented bull run," adding, "Responses from U.S. whiskey makers—such as production halts, layoffs, and facility closures—reflect this sense of crisis."