T.W Samuels Distillery - Bourbon Rickhouse, Now home to Heaven Hill and Maker's Mark Bourbon

If the saying “Rain makes corn and corn makes whiskey” is true then apparently the Bluegrass state has had a lot of rain because there are now more bourbon and other spirits filled barrels aging in the Kentucky than any other time in nearly 50 years.

It was back in 1968 that distiller’s inventory reached 8.7 million barrels. With the ups and downs in brown spirits it took 51 years to reach a new high bourbon mark of 9.1 million last year only to be exceeded by the new record high of 9.8 million barrels aging across the state in 2020.

Barrels of Distilled Spirits Aging in Kentucky

  • Total barrels of Bourbon and other spirits: 9,864,197
  • Total barrels of just Bourbon: 9,266,228 (Nobody knows what’s in those other 597,969)
  • Number of barrels of Bourbon filled last year: 2,122,954
New Riff Distilling - Aging Bourbon Barrels in the Rickhouse
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All of these numbers are based on warehouse inventories reported as of Jan. 1, 2020, submitted to the Kentucky Department of Revenue for tax purposes from 42 distillers, rectifiers and other companies licensed to store barrels. This number includes members of the Kentucky Distillers’ Association (KDA) and Kentucky Bourbon Trail members as well non-members.

It’s the first time since 1967 – when the Association started keeping records of barrel inventories – that the number of just aging Bourbon barrels topped nine million. It also marks the second year in a row that Kentucky distillers have filled two million barrels, the first time that’s happened in the modern era. From a historical perspective, the number of total barrels has increased 164% since the turn of the century.

“To the world, Kentucky’s iconic Bourbon and spirits industry is renowned and loved for its delicious, high-quality products,” said Kentucky Gov. Andy Beshear. “To Kentucky, the industry represents our history and future, with thousands of Kentuckians employed at distilleries and adjacent businesses.

“We are committed to strengthening our historic distilling industry, knowing it is not just our heritage but a main economic driver as we build a better Kentucky that works for all our citizens.”

“These highpoints are important for Kentucky’s economy because it translates into more jobs and investment by our signature industry,” said KDA President Eric Gregory. “We applaud the support of Governor Beshear, legislative leadership and lawmakers on both sides of the aisle that have helped our industry grow and flourish.

“The landmark milestones demonstrate the resiliency of Kentucky’s signature distilling industry and fortifies the state’s rightful status as the one, true and authentic home for Bourbon.” He thanked Gov. Beshear for his support and commitment to help grow the industry.

Troubled Waters Ahead for Kentucky’s Bourbon Industry – Covid19 has Decimated Tourism

Kentucky's Guide to Social Distancing Infographic - 6 Feet Equals 2 Bourbon Barrels
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Gregory said though the industry is doing well overall there are significant challenges both home and abroad.

Covid - Caution Face Masks Required
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The COVID pandemic has decimated tourism and hospitality, shuttering many bars and restaurants and diminishing sales. Retaliatory tariffs on American spirits are a dominant issue in the global marketplace. Mounting barrel taxes in Kentucky put the industry at a competitive disadvantage with other states.

Distillers are paying a record $29 million in barrel taxes this year, Gregory said. Kentucky remains the only place in the world that taxes aging barrels of spirits, a discriminatory tax that hampers distilling growth, investment and jobs.

The tax-assessed value of all aging barrels is now $3.8 billion, a $400 million increase over last year and double the rate since 2010. Barrel taxes, meanwhile, have vaulted 138% in the last 10 years alone, according to the Department of Revenue.

Even though the Kentucky legislature passed a corporate income tax credit in 2014 to offset barrel taxes, the skyrocketing number of barrels – and therefore taxes – far outpaces the amount of credit that distillers can take.

“We again call on the General Assembly to make the barrel tax credit refundable or help our homegrown industry find ways to eliminate this unfair tax,” Gregory said. “Kentucky should not have a tax structure that penalizes growth and investment on any manufacturer. It’s past time for barrel taxes to go completely.”

Bourbon is one of Kentucky’s most historic and treasured industries, an $8.6 billion economic engine that generates more than 20,100 jobs with an annual payroll topping $1 billion. Distillers also are in the middle of a $2.3 billion capital investment campaign to satisfy the global thirst for Kentucky Bourbon.

View all Kentucky Distilleries.
Learn more about the Kentucky Bourbon Trail.
Learn more about the Kentucky Bourbon Trail Craft Tour.

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