Jim Beam, one of America’s most iconic bourbon brands, has announced a pause in production at its Clermont distillery, a move that could signal deeper challenges in the whiskey industry.
Why the Pause?
The decision to halt bourbon making at the Clermont site in 2026 is driven by two main pressures: tariffs imposed by the Trump administration and a noticeable decline in consumer demand for a spirit that requires years of aging before it can be sold. The company said the pause will give it time to invest in improvements at the distillery.
While production is suspended, the bottling and warehouse facilities will stay open, as will the James B. Beam Distilling Co. visitors center and restaurant. The larger distillery in Boston, Kentucky, will continue to operate.
“We are always assessing production levels to best meet consumer demand,” the company said. It added that it is talking with the distillery’s union to determine whether there will be layoffs or other reductions.
Production and Aging Requirements
Bourbon makers must gamble well into the future because the flagship bourbon requires at least four years of aging in barrels before it can be bottled. This long maturation period means that any pause in production has a delayed impact on the product line.
Tariffs and International Trade
The whiskey industry is also wrestling with back-and-forth arguments over tariffs in Europe and Canada. In Canada, a boycott started after the Trump administration suggested annexing the country into the U.S. President Donald Trump’s declaration that he’s going to slap a 200% tariff on all European alcoholic beverages has caused a ton of anxiety among South Florida liquor and wine sellers.
Overall exports of American spirits fell 9% in the second quarter of 2025 compared to a year ago, according to the Distilled Spirits Council of the United States. The most dramatic decrease came in U.S. spirits exports to Canada, which fell 85% in the April-through-June quarter.
Bourbon Production Growth
Despite the export slump, bourbon production has grown significantly in recent years. As of January, there were about 16 million barrels of bourbon aging in Kentucky warehouses-more than triple the amount held 15 years ago, according to the Kentucky Distillers’ Association.
About 95% of all bourbon made in the U.S. comes from Kentucky. The trade group estimated the industry brings more than 23,000 jobs and $2.2 billion to the state.
Economic Impact
The pause at Clermont will affect not only the company’s own operations but also the broader local economy that depends on the distillery’s workforce and associated businesses. The company’s statement about potential layoffs signals that the economic ripple could extend beyond the plant itself.
Key Takeaways
- Jim Beam will halt production at its Clermont distillery in 2026 for at least a year to invest in facility upgrades.
- The company’s larger Boston, Kentucky, distillery will keep running, and bottling, warehousing, and the visitor center will remain open.
- Tariffs in Europe and Canada, along with a 200% European alcohol tariff announced by President Trump, are contributing to a sharp decline in U.S. spirits exports.
Closing
The decision to pause production at Clermont underscores the challenges facing the bourbon industry: long aging cycles, volatile international trade policies, and shifting consumer demand. While the company remains committed to meeting consumer needs and exploring workforce solutions, the pause will likely ripple through Kentucky’s bourbon-heavy economy for months to come.
