Kentucky Now Has 10 Million Barrels of Bourbon Aging – Double the Population


October 4, 2021

For the first time in the modern era of American whiskey, Kentucky has 10 million barrels of Bourbon aging in distillery warehouses across the Commonwealth – or more than two barrels per every person.

Kentucky’s population is about 4.51 million, according to U.S. 2020 Census Results.

Kentucky’s distilling industry also set new production records for the number of Bourbon barrels filled in a single year – nearly 2.5 million – and for the total number of all aging barrels including other spirits such as brandy, at nearly 11 million, according to an announcement from the Kentucky Distillers’ Association. These numbers are for calendar year 2020. 

“Kentucky’s signature Bourbon industry continues to invest in our Commonwealth at unprecedented levels, despite global pandemic disruptions, exorbitant taxes and ongoing trade wars,” said Eric Gregory, President of the Kentucky Distillers’ Association. “This is truly a historic and landmark record.”

Here are the specifics:

  • Total barrels of Bourbon: 10,321,793
  • Total inventory including Bourbon and other spirits: 10,880,328
  • Number of Bourbon barrels filled in 2020: 2,437,603

The tax-assessed value of all aging barrels is now $4.4 billion, the first time it has surpassed the $4 billion mark and a staggering $589 million increase over the previous year. 

Distillers will pay a record $33 million in aging barrel taxes in 2021. Kentucky remains the only place in the world that taxes aging barrels of spirits as part of the production process, a discriminatory tax that hampers growth and jeopardizes the state’s ability to attract new distillers. Barrel taxes have catapulted 140% in the last 10 years alone, Gregory said.

“The Bourbon industry is investing more than $5 billion in this state to increase production, build innovative tourism centers and create thousands of new jobs,” he said. “But punitive barrel taxes are punishing this growth and harming our chances to land new distilleries. 

He continued, “It’s time for the legislature to take action and make barrel taxes refundable or transferable, which will further incentivize distilling investment in the Commonwealth. Kentucky should not have a tax structure that penalizes growth and investment on any manufacturer.”

The Kentucky Bourbon revolution has seen tremendous growth since the turn of the century. Production has skyrocketed 436% since 1999. The state’s aging Bourbon inventory has increased 200% during that time while the total number of all barrels has nearly tripled. 

Distilling remains the highest taxed industry in the state, paying more than $300 million every year in state and local taxes. Meanwhile, an upcoming economic impact study will show that Kentucky leads the nation in federal excise taxes on alcohol, paying $1.8 billion each year with almost all coming from distillers. This means that Kentucky distillers pay about $2 billion each and every year to the government in taxes. 

Bourbon in Kentucky is an $8.6 billion economic engine that generates more than 20,100 jobs with an annual payroll topping $1 billion. Distillers also are in the middle of a $5.1 billion capital investment campaign to satisfy the global thirst for Kentucky Bourbon.

Unfortunately, retaliatory tariffs and never-ending trade wars continue to pose serious threats to those global exports, Gregory said. The European Union imposed a 25% tariff on American whiskey and other goods in 2018 in response to a U.S. tariff on steel and aluminum from the E.U. 

As a result, Kentucky Bourbon exports to the E.U. and the United Kingdom – the state’s largest whiskey export market – have plunged nearly 50%, according to data from the state Cabinet for Economic Development. And it could get worse – the E.U. tariff on American whiskey is set to double to 50% on Dec. 1.

“Our industry is collateral damage in trade disputes that have nothing to do with Bourbon,” Gregory said.