On January 1, 2026, bourbon production stops at Jim Beam’s flagship distillery in Clermont, Kentucky. For the first time in its modern history, the heart of a 230-year-old American whiskey brand will fall silent for an entire year.
The shutdown follows a stunning collapse in exports and weakening demand at home. Nearly 1,500 workers tied to the site now wait as one of bourbon’s most iconic campuses pauses distillation indefinitely.
Trade Tensions Escalate
The shutdown traces back to a sudden trade shock. In March 2025, Canadian provincial liquor boards halted purchases of American spirits in retaliation for sweeping U.S. tariffs under President Trump.
By Q2 2025, U.S. spirits exports to Canada had plunged 85%, falling below $10 million. The collapse exposed how dependent American whiskey had become on stable trade relations with its closest ally.
Bourbon’s Historic Boom
For decades, bourbon looked unstoppable. Jim Beam’s roots stretch back to 1795, and Kentucky’s distilling sector surged throughout the 21st century. Exports climbed, tourism boomed, and warehouses filled as global demand accelerated.
The industry grew into a $9 billion economic engine for Kentucky. But rapid expansion masked vulnerabilities—especially the long aging cycle that locks producers into decisions made years earlier.
Demand Shifts Radically
While exports faltered, domestic demand weakened too. In 2025, just 54% of U.S. adults reported drinking alcohol—the lowest rate in more than 30 years. Gallup data shows 53% now believe moderate drinking is harmful.
Younger consumers increasingly choose alternatives, including cannabis. After two decades of growth, bourbon sales stalled through mid-2025, signaling a structural shift rather than a short-term slowdown.
Oversupply Becomes a Crisis
Bourbon’s biggest strength—its long aging process—has become a liability. Kentucky now holds a record 16.1 million barrels aging in warehouses. Many cannot legally be bottled until after 2030.
As demand cools and exports vanish, barrels continue piling up with nowhere to go. Once filled, they cannot be easily repurposed, locking producers into years of excess inventory.
Flagship Shutdown Confirmed
Suntory Global Spirits confirmed that Jim Beam will halt all bourbon distillation at its James B. Beam campus in Clermont for the entire year of 2026. The pause begins January 1.
The site produces roughly one-third of the company’s bourbon output. The company says the shutdown aligns production with demand while allowing for facility upgrades, not a permanent closure.
Kentucky Jobs Imperiled
Nearly 1,500 employees work at James B. Beam Distilling Co. facilities across Kentucky, making the Clermont site a major regional employer. While no layoffs have been announced, the year-long halt puts jobs in limbo.
Union discussions are ongoing as management explores redeployment options. For many families in bourbon country, uncertainty has replaced what once seemed like a stable, generational industry.
Workers Voice Concerns
Employees at the Clermont campus face disrupted schedules and unanswered questions. Suntory employs about 6,000 workers globally, but Kentucky’s workforce carries unique exposure to bourbon production cycles.
The company says it remains in active talks with unions as distilling shifts to other sites. For workers tied to the flagship campus, clarity on roles and timelines remains elusive.
Rivals Cut Production Too
Jim Beam is not alone. Diageo paused whiskey production in Kentucky, Tennessee, and Texas during 2025, citing oversupply and softer demand. Other major producers have scaled back output.
Tariffs have intensified supply-chain stress, removing key export outlets. Across the industry, restraint has replaced expansion, marking a sharp reversal from years of aggressive growth.
Health Trends Reshape Markets
Health attitudes are now reshaping the spirits market. Gallup polling shows record skepticism toward alcohol, with a majority of Americans viewing moderate drinking as harmful.
The Distilled Spirits Council of the United States warns this shift compounds export losses. “The figures signal a shift away from our great American spirits brands,” said CEO Chris Swonger.
Canada’s Boycott Hits Hard
Canada’s response to U.S. tariffs delivered an immediate blow. Provincial liquor boards halted American whiskey purchases in March 2025. By April, export volumes had dropped 68%.
The decline deepened to an 85% collapse by Q2. Because bourbon must age for years, lost sales cannot be quickly redirected, leaving barrels stranded without replacement markets.
Union Pushback Builds
As the shutdown approaches, worker frustration is growing. Unions are pressing for clearer commitments on job security, redeployment, and duration of the pause.
While Suntory says no layoffs are planned, uncertainty persists. The tension highlights how quickly trade policy and consumer behavior can ripple down to individual worksites.
Suntory Leadership Turmoil
The crisis coincides with leadership upheaval at Suntory. Chairman and CEO Takeshi Niinami resigned in September 2025 amid a police probe involving alleged cannabis-derived supplements.
While unrelated to bourbon operations, the turmoil adds pressure as the company navigates trade fallout and declining demand during a pivotal moment.
Strategic Production Pivot
During the Clermont pause, Jim Beam will continue distilling at the Booker Noe site in Boston, Kentucky, and the Fred B. Noe craft distillery in Clermont.
Bottling and warehousing will continue at the James B. Beam campus, and the visitor center will remain open. The company says the pause allows investment in site enhancements.
Trade Talks Loom Large
Formal U.S.–Canada trade agreement review talks resume in mid-January 2026, offering a possible path to easing tariffs. But bourbon’s long aging cycle limits recovery speed.
With millions of barrels locked until the next decade and drinking rates at historic lows, analysts question whether demand will rebound in time.
Sources:
Distilled Spirits Council of the United States (DISCUS) — American Spirits Exports 2025 Mid-Year Report — October 16, 2025
The Spirits Business — US spirits exports to Canada plummet 85% in Q2 — October 6, 2025
The Spirits Business — Ageing Bourbon barrel numbers hit all-time high — October 8, 2025
WBUR/Here & Now — Jim Beam pausing main Kentucky distillery for 2026 — December 22, 2025
The Spirits Business — Main Jim Beam distillery to cease production for 2026 — December 22, 2025
Gallup Poll — U.S. Drinking Rate at New Low as Alcohol Concerns Surge — September 8, 2025