Boasting more than 125 distilleries, the most since the Repeal of Prohibition, Kentucky now has an all-time high of 16.1 million aging barrels of Bourbon in its warehouses, the Kentucky Distillers’ Association announced today.

And while homegrown distilleries across the Commonwealth have cemented Kentucky’s place as the one, true and authentic home of Bourbon, the record number of barrels comes with a price that no other distiller in the world pays.

Kentucky distillers are footing a crushing $75 million tab in aging barrel taxes this year, a 27% increase from 2024 and an astronomical 163% increase over the last five years alone. Kentucky remains the only place in the world that taxes aging barrels of spirits.

Barrel taxes are based on the assessed value of aging barrels which surged to $10 billion this year, a 25% increase over last year’s record of $8 billion. In addition to the 16.1 million barrels of Bourbon, a million barrels of other spirits are aging for a total of 17.1 million barrels.

The new numbers are based on inventories reported as of Jan. 1, 2025, submitted by distilleries and warehousing companies to the Kentucky Department of Revenue. The numbers represent all distilling companies in Kentucky, the vast majority of which are KDA members.

KDA President Eric Gregory said the barrel inventory record is a mixed blessing.

From a “glass half full” viewpoint, there are now a record 127 licensed beverage alcohol distilleries in the Commonwealth operated by 103 companies. Several more have been announced or are under construction, meaning more jobs and investment for Kentucky.

With distillers now in 49 of Kentucky’s 120 counties, more local communities are enjoying the benefits of Bourbon tourism through the KDA’s Kentucky Bourbon Trail experiences that attract nearly three million visitors a year from across the globe.

“In more communities across the Commonwealth, Bourbon is a point of pride and opportunity. Our industry delivers unmatched tax revenues and world-class Bourbon tourism that no other state comes close to experiencing,” Gregory said. “And remember – most of these barrels won’t be ready to bottle until 2030 and beyond. We must be ready for that time. Kentucky is poised long-term to continue leading American whiskey into new global markets, new opportunities and through challenging headwinds.”

From a “glass half empty perspective,” Gregory said continued uncertainty over tariffs, competition for leisure dollars, snowballing taxes and generational shifts in drinking have slowed sales and slashed exports.

“We have been sounding alarms for years on these external factors,” he said. “But just as you can’t make Bourbon overnight, we won’t fix the problems we’re facing overnight. We must continue to work with policymakers to find solutions and ensure Bourbon’s long-term future.”

Gregory said changes made to address the barrel tax issue is a good example. The KDA warned elected officials for years that mounting barrel taxes were unsustainable and put the industry at a competitive disadvantage.

Relief is in sight, however, thanks to a gradual, 20-year phase-out of the discriminatory tax passed by the Kentucky General Assembly in 2023. Next year marks the first year distillers will see some relief – a 4% reduction in the taxes.

On the global front, Gregory reiterated the KDA’s call for a speedy return to reciprocal, tariff-free trade that had transformed Kentucky Bourbon into a key export for the Bluegrass. 

“You’re not going to find a better model for reciprocal trade than Kentucky Bourbon,” he said. “Kentucky Bourbon is a great American success story. Trade agreements with the European Union, United Kingdom, Canada, Mexico and other allies played a vital role in the Bourbon renaissance that has created thousands of Kentucky jobs and led to billions in investment.”

Gregory said the KDA has recently hosted trade leaders from Canada and Ireland, met with the First Minister of Scotland, and consulted with Kentucky’s Congressional delegation to advocate for the removal of trade barriers to keep Bourbon competitive and to unlock new markets.

“Much of the expansion over the last decade has been geared towards global growth,” he said.“Long-term planning for a product that won’t be ready for years is already tough enough. We need the certainty of tariff-free trade for America’s only native spirit to flourish.”

For pundits who remain unsure whether their glass is half-full or half-empty, Gregory issued a reminder that Kentucky’s signature industry is no stranger to hardship – from the dark days of Prohibition to the downturn of the 1970s and 1980s.

“For 200 years, this industry has survived everything thrown at them,” he said. “This is a resilient industry, and the great American workers who make it possible are steadfast through the ups and downs. For that, we raise a glass to them.

“Every one of our 17.1 million barrels represents a Kentucky Bourbon promise to our farmers, our workforce, our communities and Bourbon lovers worldwide. We are one Bourbon family. We will innovate, problem-solve, adapt and come out stronger than ever.”

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