LOUISVILLE, Ky. (WDRB) -- In a record-breaking year, Kentucky bourbon distillers filled 3.2 million barrels, marking the highest production level ever.

While this surge has positioned the industry on a historic high, it also presents a unique challenge: an unprecedented bourbon surplus. Much of it was destined for international markets, but an impending tariff could hinder global exports.

Eric Gregory, president of the Kentucky Distillers Association, is warning members about a significant obstacle on the horizon—a 50% European Union tariff set to take effect in March.

“These barrels that are sitting here right now, getting ready to be dumped—they need a place to go,” Gregory emphasized, highlighting the urgency to secure market avenues.

“All that growth—billions and billions in growth—that has happened in the last decade was geared toward the international market," he said, elaborating on the stakes involved.

The industry’s economic turbulence is further reflected in Brown-Forman’s recent decision to close its famed cooperage in Louisville. The move appears to be part of a broader corporate cost-cutting strategy.

The company’s 2024 annual report revealed a 1% decline in sales within the United States and Japan. However, despite the sales dip, Brown-Forman’s overall profits increased by 1%.

Bill Muchow, a bourbon enthusiast, provided insight into market dynamics, suggesting that while the industry remains strong, its rapid growth may be leveling off.

“I think it’s plateaued," Muchow said. "I don’t think it’s necessarily going down, but I don’t see any more rise. Still very strong."

Two bourbon shoppers from Illinois, visiting Louisville to select barrels for a local liquor store, noted surprising trends among younger consumers.

“Just being in the store, it surprises me how young they are. They come in educated. They like it. They’re into it," Muchow said.

Closer to home, Randy Prasse, with the Kentucky Bourbon Festival, has observed evolving demographics among festival attendees in Bardstown.

“We are seeing a lot more younger, multi-generational attendees—father-son, mother-daughter. There are a lot more women enjoying bourbon than most people, including me, would have expected. Our diversity is tremendous,” Prasse said.

While consumer tastes are shifting, the industry is adaptable. The real threat lies in the looming 50% tariff. If enacted, it could significantly stifle growth and disrupt an otherwise resilient market.

With millions of barrels aging in warehouses and international sales facing potential hurdles, Kentucky’s bourbon industry is bracing for a challenging year ahead.

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