Jim Beam Halts Kentucky Distillery Operations for Minimum Year Due to Tariff Pressures and Declining Demand

Jim Beam has announced it will halt production at one of its Kentucky distilleries for at least a year, citing tariffs imposed by the Trump administration and reduced demand for its bourbon.

The company stated that the decision to suspend bourbon production at its Clermont facility in 2026 will provide time for investments aimed at improving operations at the distillery. The bottling and warehouse facilities at the site will remain open, along with the James B. Beam Distilling Co. visitors center and restaurant. Jim Beam confirmed that its larger distillery in Boston, Kentucky, will continue operating normally.

In a statement, the company emphasized it is “always assessing production levels to best meet consumer demand.” The whiskey maker also indicated it would hold discussions with the distillery union to determine potential layoffs or workforce reductions.

Jim Beam’s flagship bourbon requires at least four years of aging in barrels before bottling. Whiskey producers have faced significant challenges navigating tariffs in Europe and Canada, where a boycott began after President Donald Trump suggested annexing the country into the U.S.

U.S. spirits exports fell 9% in the second quarter of 2025 compared to the same period last year, according to the Distilled Spirits Council of the United States. The most dramatic decline occurred in exports to Canada, which dropped 85% during April through June of this year.

Despite declining sales, bourbon production has grown substantially in recent years. As of January, Kentucky warehouses held approximately 16 million barrels of aging bourbon—more than triple the amount stored 15 years ago, per the Kentucky Distillers’ Association. The state accounts for about 95% of all U.S.-produced bourbon, an industry that supports over 23,000 jobs and generates $2.2 billion annually for Kentucky’s economy.