Jim Beam Announces Pause in Production Amid "Skyrocketing Taxes" in Kentucky

The main Jim Beam distillery in Clermont, Ky., will close down its production as of Jan. 1, 2026. This doesn't mean the company as a whole is stopping production across the board, but this pause in production at the flagship location has many wondering why the company behind Jim Beam, Suntory Global Spirits, or Japan's Suntory Holdings, made the decision.

Jim Beam is arguably one of the most well-known names in the United States when it comes to making bourbon. However, due to a number of reasons, the main distillery associated with the brand was forced to make a tough decision about its flagship location. Other distilleries will remain open in Kentucky, but what does this seemingly temporary pause in production mean?

According to CBS News, the decision to pause production at Jim Beam's main distillery came about because of plans to work on site enhancements at that location. But the pause might also be due to a decrease in adult Americans who buy and drink alcohol. In August 2025, the consulting company Gallup reported that 54 percent of adults across the U.S. now consume alcohol, which is reportedly close to a 90-year low.

Rep. Morgan McGarvey told Spectrum News 1 in Louisville that bourbon companies have dealt with fallout from Donald Trump-imposed tariffs.

"When those sales are down because it's so much more expensive because of the president's trade policies, people aren't buying as much, and of course that means we have an incredible amount of excess capacity here," McGarvey said.

In October 2025, the Kentucky Distillers' Association (KDA) announced that an increase in taxes on aged barrels had caused a five-year strain on state-wide distilleries. Per the association, there was a 163 percent tax increase over the course of five years. The taxes are on aging barrels alone, of which there were, at that time, 16.1 million in Kentucky across different distilleries.

With Jim Beam's overabundance of aging barrels, it makes sense for the brand to want to take a break from making more, given the tax increase. But, because some barrels that are currently present in the state won't be able to be opened until around 2030, according to KDA President Eric Gregory, per the association, that makes a pause in production for any plant difficult.

Although Jim Beam will halt production at the Clermont location, the campus will reportedly remain open. What does that mean for distillery employees, though? Per CNN, the company has not announced layoffs at this time. There also hasn't been an announcement of the distillery shutting down for good.

Employees of Jim Beam who bottle products and who work in the Clermont warehouse will continue to maintain their positions. Per AP News, employees could be reassigned elsewhere at Kentucky distilleries while the pause in production continues at the Clermont distillery. As reported by Spectrum News 1, the United Food and Commercial Workers Local 111D union said that, as of December 2025, it was working to ensure that employees are not too strongly impacted by this move.