Jim Beam, one of the most storied names in American whiskey, is set to halt bourbon production at its historic Clermont, Kentucky distillery for the entirety of 2026. The announcement, made in late December 2025, has sent ripples through the spirits industry and beyond, highlighting a confluence of challenges that have hit bourbon makers hard—from changing consumer habits to international trade wars and a glut of unsold barrels stacking up in Kentucky warehouses.
The company, owned by Japanese drinks giant Suntory Global Spirits, emphasized that this move is not a permanent shutdown. Rather, Jim Beam will use the pause as "the opportunity to invest in site enhancements," according to a statement provided to the BBC. While the stills will go quiet at Clermont, the site’s bottling operation, warehouses, visitor center, and restaurant will all remain open. Meanwhile, Jim Beam’s larger distillery in Boston, Kentucky, along with other company sites, will continue to operate without interruption.
"We are always assessing production levels to best meet consumer demand and recently met with our team to discuss our volumes for 2026," the company explained in its statement. The company is also in discussions with the distillery’s union to determine how its workforce—part of more than 1,000 employees across Kentucky—will be deployed during the production pause. For now, layoffs are not planned, and many workers are being reassigned to other roles.
What’s behind this dramatic decision? The answer is a complex cocktail of market forces and political headwinds. Bourbon, an industry that famously requires patience—Jim Beam’s flagship bourbon needs at least four years of aging in barrels before bottling—has been caught in a perfect storm. For years, distillers ramped up production, betting big on rising global demand. As of October 2025, there were more than 16 million barrels of bourbon aging in Kentucky warehouses, a record high and more than triple the amount held 15 years ago, according to the Kentucky Distillers’ Association (KDA).
But that bet has started to backfire. Americans are drinking less alcohol than they have in decades, a trend driven by health concerns, rising prices, and competition from alternatives like ready-to-drink cocktails, cannabis products, and even weight-loss medications. Younger consumers in particular—think Gen Z—are drinking less frequently and when they do, they’re opting for higher-end bottles in smaller quantities. This shift has hit brands like Jim Beam, which rely on high-volume, lower-priced staples, especially hard.
The export picture is just as grim. According to the Distilled Spirits Council of the United States, overall American spirits exports fell 9% in the second quarter of 2025 compared to the previous year. The most dramatic collapse came in Canada, once a crucial market for American whiskey, where exports plummeted by 85% between April and June. This steep drop is attributed to a widespread Canadian boycott of American spirits, itself a direct response to tariffs imposed by the Trump administration earlier in the year.
The KDA put it bluntly, noting, "Much of the expansion over the last decade has been geared towards global growth," as it called for "a speedy return to reciprocal, tariff-free trade." The group also pointed out the heavy tax burden distillers now face, with Kentucky’s record barrel inventory costing producers "a crushing $75 million" in state taxes this year alone.
Trade tensions have only added fuel to the fire. After President Donald Trump’s so-called "Liberation Day" announcement in April 2025, the U.S. slapped tariffs on most countries around the world. Retaliatory import taxes quickly followed, with international markets that had fueled bourbon’s export boom—Canada, the EU, the UK, and Japan—all scaling back their purchases. The knock-on effects have been severe, cutting off a vital pressure valve for U.S. producers who suddenly found themselves awash in whiskey they couldn’t sell abroad.
The pain isn’t limited to Jim Beam. Other major players in American whiskey have felt the squeeze. Diageo paused distilling at its George Dickel facility in Tennessee, while Brown-Forman, the company behind Jack Daniel’s, announced layoffs affecting about 12% of its workforce. Several smaller Kentucky whiskey companies, including the historic Kentucky Owl brand and the $250 million Garrard County Distilling operation, have entered bankruptcy or closed their doors in the past year. Contract distillers, too, report a sharp decline in orders as brands pull back on production.
Industry expert Fred Minnick, speaking to the New York Times, captured the mood among bourbon lovers and producers alike: "It’s a sad day for bourbon, to be honest with you. For this to happen is a real punch in the gut."
Despite these setbacks, Jim Beam is quick to assure fans that their favorite bourbon isn’t about to vanish from shelves. Thanks to the years-long aging process and existing stockpiles, bottles will continue to flow to retailers. The company’s bottling and warehouse operations will keep humming, and the James B. Beam Distilling Co. visitors center and restaurant will remain open for tourists and bourbon aficionados alike.
Still, the production pause marks a sobering moment for an industry that has seen dizzying highs and painful lows before. Bourbon production has always been a gamble on the future—laying down barrels today in hopes of meeting demand years down the line. But as the current glut shows, even the best-laid plans can run aground when tastes change and global politics intervene.
Looking forward, the bourbon industry faces tough questions. Will American drinking habits rebound? Can trade tensions be resolved before more distilleries are forced to scale back or shutter? And how will Kentucky’s signature spirit adapt to a world where both supply and demand are in flux?
For now, Jim Beam’s decision to pause production at its Clermont distillery stands as a stark signal: the bourbon boom has hit a wall, and the industry must find a new path forward amid uncertainty and change.
