Ageing Bourbon barrel numbers hit all-time high
The number of ageing barrels of Bourbon in Kentucky has hit a record high of 16.1 million, with taxes on the casks soaring by 163% over the last five years.
According to the Kentucky Distillers’ Association (KDA), the new figures are based on inventories that were submitted by distilleries and warehousing companies to the state’s Department of Revenue on 1 January 2025.
In addition to the 16.1m Bourbon barrels, there are 1m barrels of other spirits ageing in the state.
Kentucky distilleries are also paying a US$75m tab in ageing barrels taxes this year, a rise of 27% on 2024 and an increase of 163% over the last five years.
Barrel taxes are based on the assessed value of ageing barrels, which reached US$10 billion this year, a 25% hike on last year’s record of US$8bn.
Furthermore, there are now a record total of 127 licensed distilleries operated by 103 companies in Kentucky, which KDA president Eric Gregory described as a “glass half full” perspective.
Gregory said: “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.
“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.”
The whiskey industry is currently facing challenges such as tariff uncertainty, tax hikes, increased competition and shifts in drinking habits that have resulted in sales declines and a drop in exports.
“We have been sounding alarms for years on these external factors,” Gregory continued. “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.”
One positive for the industry is gradual tax relief due to a 20-year phase out of duty paid on barrels that was passed by the Kentucky General Assembly in 2023. Next year marks the first year that distilleries will benefit from the move, with a tax reduction of 4%.
Gregory also called for a quick return to tariff-free trade for the whiskey sector.
“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,” he added.
“Much of the expansion over the last decade has been geared towards global growth.
“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.”
The state’s Bourbon Trail received a record 2.7m visitors in 2024, up from 2.5m in 2023.
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