It was about a month ago that global spirits brand Diageo announced it was selling 19 brands to Sazerac for $550 million. Now we’ve learned where a quarter of that money is going as Diageo just announced the construction of a new $130 million distillery to be built in Lebanon, Kentucky. Lebanon, in Marion County is also home to Maker’s Mark Distillery (owned by Beam Suntory) and Limestone Branch Distillery (owned by Luxco.)
The new distillery will be the third distillery in Kentucky for Diageo. The company also owns Bulleit Frontier Whiskey at Stitzel-Weller Distillery in Louisville and the recently opened Bulleit Distilling Co. in Shelbyville. The Stitzel-Weller location has a visitor center, a bottling line and an experimental still. The $140 million Bulleit operation includes a 3 million proof gallon distillery and six barrel warehouses. The new distillery is expected to produce more than 3x that amount with a capacity of up to 10 million proof gallons per year.
Diageo expects the project to begin in summer 2019 and go operational by early 2022. The facility will include a distillery, dry house and warehousing. Currently, Diageo employs more than 100 people in Kentucky. The new facility is expected to create 30 new jobs.
“It was just last year that we unveiled Diageo’s Bulleit distillery in Shelbyville, and this latest investment is another example of continued growth for the company and within our bourbon and spirits industry,” Gov. Bevin said. “We are honored to broaden our relationship with Diageo and are grateful for their further commitment to Kentucky.”
Bulleit Distilling Co – Shelbyville, Kentucky
“We thank the Kentucky Economic Development Finance Authority, Gov. Matt Bevin, the Marion County Industrial Foundation and the City of Lebanon for their continued support of Diageo as we look to further invest in Kentucky’s spirits industry,” said Barry Becton, senior director of federal affairs and whiskey at Diageo North America. “Bourbon and American whiskey are vibrant and growing categories and we are excited to expand Diageo’s footprint in Kentucky to support our ambitions in this space.”
“This new distillery is an exciting opportunity for Lebanon,” said Sen. Jimmy Higdon, of Lebanon. “Diageo is a leading premium beverage producer that has been proven valuable to Kentucky’s world famous bourbon industry. This could be one of the biggest developments in recent Marion County history. I am hopeful that this investment will encourage tourism and future development within our community.”
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Rep. Brandon Reed, of Hodgenville, noted the impact the additional employment will bring.
“New jobs and business growth are always good news in our rural areas,” Rep. Reed said. “More jobs and economic opportunity are the positive trends we continue to see thanks to the pro-business policies coming out of Frankfort, and I’m excited about the economic opportunity that this announcement will provide to families in Marion County.”
Lebanon Mayor Gary Crenshaw said Diageo will help drive the local bourbon industry. “With Marion County’s rich history in the bourbon industry we are proud and humbled to add Diageo’s name to this evolving legacy,” Mayor Crenshaw said.
To encourage the investment and job growth in the community, the Kentucky Economic Development Finance Authority (KEDFA) on Thursday preliminarily approved the company for tax incentives up to $2.5 million through the Kentucky Business Investment program. The performance-based incentive allows a company to keep a portion of its investment over the agreement term through corporate income tax credits and wage assessments by meeting job and investment targets.
Additionally, KEDFA approved Diageo for up to $1.5 million in tax incentives through the Kentucky Enterprise Initiative Act (KEIA). KEIA allows approved companies to recoup Kentucky sales and use tax on construction costs, building fixtures, equipment used in research and development and electronic processing.
Diageo also can receive resources from the Kentucky Skills Network. Through the Kentucky Skills Network, companies can receive no-cost recruitment and job placement services, reduced-cost customized training and job training incentives.
Diageo is a global beverage alcohol producer with a collection of brands that includes Bulleit and Buchanan’s whiskies, Johnnie Walker, Crown Royal, Smirnoff, Cîroc and Ketel One vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray and Guinness. It sells products in more than 180 countries and employs more than 30,000 people globally with offices in 80 countries. In addition to North America, it also operates manufacturing facilities in Great Britain, Ireland, Canada, Spain, Italy, Australia, India, Africa, Latin America and the Caribbean.
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